==============================================================================

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549
                          ---------------------------

                                  FORM 20-F/A

        ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934

                  For the fiscal year ended December 31, 2000

                        Commission file number: 1-15194

                    COMPANHIA DE BEBIDAS DAS AMERICAS-AMBEV
            (Exact name of Registrant as specified in its charter)
American Beverage Company-AmBev               Federative Republic of Brazil
 (Translation of Registrant's                (Jurisdiction of incorporation
     name into English)                            or organization)

              Avenida Maria Coelho Aguiar, 215, Bloco F, 6o floor
                        05804-900 Sao Paulo, SP, Brazil
                   (Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

                                                    Name of each exchange
     Title of each class                             on which registered
     -------------------                            ---------------------
American Depositary Shares,                        New York Stock Exchange
evidenced by American Depositary
Receipts, each representing
100 Common Shares

Common Shares, no par value*
American Depositary Shares,
evidenced by American                              New York Stock Exchange
Depositary Receipts, each
representing 100 Preferred Shares

Preferred Shares, no par value*

*    Not for trading but only in connection with the registration of the
     American Depositary Shares, pursuant to the requirements of the
     Securities and Exchange Commission.

      The number of outstanding shares of each of the issuer's classes of
               capital or common stock as of April 10, 2001 was:

                         15,976,336,195 Common Shares
                        23,238,852,050 Preferred Shares

    Indicate by checkmark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
   1934 during the preceding 12 months (or for such shorter period that the
  registrant was required to file such reports), and (2) has been subject to
                such filing requirements for the past 90 days.

                         Yes [X]   No  [ ]   Not Applicable  [ ]

           Indicate by check mark which financial statement item the
                      registrant has elected to follow.

                             Item 17 [ ] Item 18 [X]


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<PAGE>



TABLE OF CONTENTS

Introduction...............................................................(i)
The Combination and Brazilian Antitrust Approval...........................(i)
Accounting Periods and Principles........................................(iii)
Currency Translation......................................................(iv)
Industry Data.............................................................(iv)
Trademarks................................................................(iv)
Cautionary Statement
Regarding Forward-looking Information......................................(v)

PART I

Item 1.   Identity of Directors, Senior Management and Advisers..............1
Item 2.   Offer Statistics and Expected Timetable............................1
Item 3.   Key Information....................................................1
Item 4.   Information on the Company........................................18
Item 5.   Operating and Financial Review and Prospects......................45
Item 6.   Directors, Senior Management and Employees........................70
Item 7.   Major Shareholders and Related Party Transactions.................80
Item 8.   Financial Information.............................................88
Item 9.   The Offer and Listing ............................................93
Item 10.  Additional Information...........................................101
Item 11.  Quantitative and Qualitative Disclosures About Market Risk.......119
Item 12.  Description of Securities Other than Equity Securities...........124

PART II

Item 13.  Defaults, Dividend Arrearages and Delinquencies..................125
Item 14.  Material Modifications to the Rights of Security Holders and
          Use of Proceeds..................................................125
Item 15.  Reserved.........................................................125
Item 16.  Reserved.........................................................125

PART III

Item 17.  Financial Statements.............................................126
Item 18.  Financial Statements.............................................126
Item 19.  Exhibits.........................................................126

Signatures


<PAGE>


                                 INTRODUCTION

     This annual report on Form 20-F relates to the two classes of registered
American Depositary Shares (ADSs) of Companhia de Bebidas das Americas - AmBev
evidenced by American Depositary Receipts (ADRs) representing 100 preferred
shares of AmBev and ADSs evidenced by ADRs representing 100 common shares of
AmBev.

     In this annual report, except as otherwise indicated or as the context
otherwise requires, the "Company", "Ambev", "we", "us" and "our" refers to
Companhia de Bebidas das Americas - AmBev and its subsidiaries.

     On March 31, 2001, AmBev's subsidiary Companhia Cervejaria Brahma
(Brahma) merged into Companhia Antarctica Paulista Industria Brasileira de
Bebidas e Conexos (Antarctica), with Antarctica remaining as the surviving
corporation. On the same day, Antarctica changed its name to Companhia
Brasileira de Bebidas (CBB). We will refer in this annual report variously to
"Brahma", "Antarctica" or "CBB" as the context requires.

               THE COMBINATION AND BRAZILIAN ANTITRUST APPROVAL

The Combination

     AmBev was formed through the combination of Brazil's two largest beverage
companies, Brahma and Antarctica (the combination). The combination involved
the formation of AmBev, as a holding company for Brahma and Antarctica. The
combination was effected over the course of 1999 and 2000, beginning with the
contribution of shares of the controlling shareholders of Brahma and
Antarctica in exchange for shares of AmBev (the controlling shareholders'
contribution) on July 1, 1999, and followed by the consummation of
transactions by which Antarctica and Brahma became wholly owned subsidiaries
of AmBev on September 15, 1999 and September 14, 2000, respectively, and the
public shareholders of Brahma and Antarctica became shareholders of AmBev.

     Pursuant to the controlling shareholders' contribution on July 1, 1999,
Brahma's controlling shareholders, Empresa de Administracao e Participacoes
S.A. ECAP (ECAP) and Braco S.A. (Braco), and Antarctica's controlling
shareholder, Fundacao Antonio e Helena Zerrenner Instituicao Nacional de
Beneficencia (the Zerrenner Foundation), contributed all of their common and
preferred shares in Brahma and Antarctica in exchange for AmBev shares of the
same type and class.

     On July 1, 1999, the Zerrenner Foundation, Braco, and ECAP, the
controlling shareholders of AmBev, as well as AmBev and Marcel Telles, Jorge
Paulo Lemann and Carlos Alberto Sicupira, entered into a shareholders'
agreement that contains provisions relating to the voting of shares of AmBev
and the voting by AmBev of the shares of its subsidiaries. Messrs. Telles,
Lemann and Sicupira are the controlling shareholders of Braco, which , in
turn, owns 99.7% of the voting shares of ECAP. For a detailed description of
the AmBev shareholders' agreement, see "Item 7--Major Shareholders and Related
Party Transactions--Major Shareholders--AmBev Shareholders' Agreement".

Brazilian Antitrust Approval

     Brazilian antitrust authorities have the power to investigate any
transaction which results in the concentration of a market share equal to or
greater than 20% of any relevant market or which involves, among other
factors, any company whose annual gross income is R$400 million (approximately
US$175 million) or more. The transfer of control of Brahma and Antarctica to
AmBev through the controlling shareholders' contribution resulted in a market
share for AmBev in excess of 70% of the Brazilian beer market and 20% of the
Brazilian soft drink market. Brazilian antitrust authorities


                                      (i)


<PAGE>


therefore reviewed the transaction to determine whether it would negatively
impact competitive conditions in the relevant markets, or whether it would
negatively affect consumers.

     The Conselho Administrativo de Defesa Economica (CADE), an independent
agency of the Brazilian Ministry of Justice, is the principal Brazilian
antitrust authority. On July 14, 1999, CADE issued an interim order in
connection with the controlling shareholders' contribution that placed
temporary limits on the actions of Brahma and Antarctica relating to their
integration. On April 7, 2000, CADE approved the controlling shareholders'
contribution subject to restrictions designed to prevent AmBev from exercising
excessive control over the Brazilian beer market. CADE imposed no restrictions
in connection with soft drinks or other beverages produced by AmBev. On April
19, 2000, AmBev entered into a performance agreement with CADE pursuant to
which AmBev agreed to comply with the restrictions imposed by CADE. The
principal terms of the performance agreement include:

     o For a period of four years, AmBev must share its distribution network
       with at least one regional Brazilian beer company, which cannot have a
       market share in excess of 5% of its respective regional market, in each
       of the five regions of Brazil as defined by CADE. This obligation is
       independent of AmBev's obligation, associated with the sale of Bavaria,
       to share its distribution network with the purchaser of Bavaria for a
       certain specified period of time (see below). AmBev must choose the
       companies through a public bidding process and must select those that
       offer to pay AmBev the highest distribution commissions. In March 2001,
       we commenced the public bidding process for the sharing of our
       distribution network with regional beer companies. One Company made a
       bid for all five regions. The bid is currently being reviewed by CADE;

     o For a period of four years, if AmBev decides to close or dispose of any
       of its beer plants, it must first offer such plant for sale in a public
       auction;

     o For a period of five years, if AmBev or any of its subsidiaries
       dismisses any employees as a result of the restructuring process
       relating to the combination and other than for cause, it must attempt
       to place the employee in a new job, and provide the employee with
       retraining, as appropriate;

     o AmBev and its distributors cannot demand that their points of sale
       operate on an exclusive basis, except where AmBev's investments and
       improvements are equivalent to a majority of the assets of the point of
       sale or such exclusivity is, in the opinion of the management of the
       point of sale, in its interest; and

     o A requirement that AmBev sell Antarctica's Bavaria brand and related
       assets. The principal requirements of the Bavaria sale, which have been
       completed, were as follows:

       (a) the transfer, to a single purchaser holding no more than 5% of the
           Brazilian beer market, of the Bavaria brand (including the Bavaria
           Pilsen and Bavaria Premium brands) and five beer plants;

       (b) the sharing of our distribution network with the purchaser for a
           period of four years, renewable for an additional two-year period
           at the option of the purchaser. During the initial four-year
           period, the purchaser will not have to pay any commission for the
           use of our network, although it will have to pay costs associated
           with freight and distributors' commissions; and

       (c) the maintenance prior to sale of specified minimum levels of
           publicity and marketing expenditures relating to the Bavaria brand,
           and the use of reasonable efforts to keep Bavaria's market share at
           a minimum of 4.7% of the Brazilian beer market.


                                     (ii)


<PAGE>


     On November 6, 2000 we entered into an agreement with Molson Inc. for the
sale of Bavaria consistent with our performance agreement with CADE. Our
agreement with Molson provides for an initial purchase price of US$98.0
million. Thereafter, Molson must pay a further US$23.0 million for each
additional 0.5% of market share achieved by the Bavaria brand on a yearly
basis during a five-year period, up to a maximum additional payment of
US$115.0 million. At the time of sale, Molson agreed to purchase Bavaria at
its then-current 4% market share. CADE approved this agreement on December 13,
2000 and the sale was completed on December 20, 2000. A percentage of the
proceeds from the sale of Bavaria go to our affiliate Miranda Correa, which
owned one of the plants sold to Molson. For additional information regarding
the sale of Bavaria, see Note 1 to AmBev's consolidated financial statements.

     The performance agreement has a term of five years, and noncompliance
with any of its obligations will trigger a minimum daily fine of R$5,320 per
occurrence. This daily fine can be increased up to a maximum of R$106,410 per
occurrence and may be assessed until such time as AmBev complies with the
specific obligation. In the event of noncompliance, CADE may also appoint a
judicial officer to enforce compliance. CADE has the authority to revoke its
approval of the controlling shareholders' contribution and to file an
administrative proceeding against us if we do not comply with our obligations.
CADE also has the general authority to order other remedial measures as
provided by law and as established under the performance agreement.

Accounting Aspects of the Combination

     For information on certain accounting aspects of the combination, see
"Item 5--Operating and Financial Review and Prospects--Operating
Results--Accounting Aspects of the Combination".

                       ACCOUNTING PERIODS AND PRINCIPLES

     AmBev has prepared its audited annual consolidated financial statements
as of December 31, 2000 and 1999 and for the three years ended December 31,
2000 in U.S. dollars in accordance with United States generally accepted
accounting principles (U.S. GAAP). For the methodology of translation of
amounts into U.S. dollars in the financial statements of AmBev see "Item
5--Operating and Financial Review and Prospects--Operating
Results--Introduction". Prior to July 1, 1999, the date of the controlling
shareholders' contribution, AmBev had no material assets, liabilities or
operations. However, for accounting purposes AmBev is treated as the successor
to Brahma. As a result, the financial statements of AmBev as of December 31,
1998, 1997 and 1996 and for the years ended December 31, 1998, 1997 and 1996
are substantially the same as the financial statements of Brahma as of such
dates and for such periods. As described in "Item 5--Operating and Financial
Review and Prospects", the financial statements of AmBev as of any date and
for any period ending after June 30, 1999, reflect the combination of Brahma
and Antarctica.

     Unless otherwise stated or unless the context otherwise requires or
implies, financial data of AmBev, Brahma and Antarctica presented in this
annual report are derived from their U.S. GAAP financial statements. The
segment data that is included in AmBev's U.S. GAAP financial statements is
generally prepared in accordance with accounting principles set forth in
Brazilian corporation law. Therefore, unless otherwise stated or unless the
context otherwise requires or implies, financial data included in this annual
report of AmBev, Brahma and Antarctica in respect of their beer, soft drink or
"other" segments is generally based on Brazilian corporation law accounting
principles. See "Item 5--Operating and Financial Review and
Prospects--Operating Results--Presentation of Segment Financial Data".


                                     (iii)


<PAGE>



     Pursuant to our performance agreement with CADE, we sold Antarctica's
Bavaria beer brand and five breweries on November 6, 2000. See "The
Combination and Brazilian Antitrust Approval-- Brazilian Antitrust Approval".
Except as otherwise stated, however, historical operating and financial data
of AmBev and Antarctica as of any date ended prior thereto or for any period
ending on or before November 30, 2000, include the assets, operations and
liabilities associated with Bavaria.

     Percentages and some amounts in this annual report have been rounded for
ease of presentation. Any discrepancies between totals and the sums of the
amounts listed are due to rounding.

                             CURRENCY TRANSLATION

     In this annual report, references to "real", "reais" or "R$" are to the
Brazilian legal currency. We have translated some of the Brazilian currency
amounts contained in this annual report into U.S. dollars. The rate used to
translate such amounts was R$1.9554 to US$1.00, which was the commercial
market rate for the purchase of U.S. dollars in effect on December 31, 2000,
as disclosed by the Central Bank of Brazil (Central Bank), unless the data is
derived from the financial statements of AmBev, Brahma or Antarctica that are
prepared in U.S. dollars, or unless the context otherwise requires or implies.
The commercial market rate on May 31, 2001 was R$2.36 to US$1.00. The U.S.
dollar equivalent information presented in this annual report is provided
solely for the convenience of the readers of this annual report and should not
be construed as implying that the Brazilian currency amounts represent, or
could have been or could be converted into, U.S. dollars at such rates or at
any rate. See "Item 3--Key Information--Exchange Rate Information--Exchange
Controls" for more detailed information regarding the translation of reais
into U.S. dollars.

                                 INDUSTRY DATA

     In this annual report, we refer to information regarding the beverage
market and its segments and competitors from AC Nielsen (Nielsen), the
Brazilian association of beer producers (Sindicerv), PepsiCo, Inc. (PepsiCo),
market research reports, analyst reports and other publicly available sources.
The entities listed above are aware of and have consented to being named in
this annual report. Additionally, with their consent, we have relied on or
referred to Impact Databank (Impact), a beer industry publication, with
respect to certain other information. All such Impact information comes from
"The Global Drinks Market: Impact Databank Review & Forecast @ 2001", a
publication of M. Shanken Communications (New York), Telephone (212) 684-4224.
Although we believe that all of the information referred to in this paragraph
is reliable, we have not independently verified the accuracy and completeness
of the information, and we therefore cannot guarantee it.

                                  TRADEMARKS

     This annual report includes names of our products which constitute
trademarks or trade names which we own or which are owned by others and are
licensed to us for our use. This annual report also contains other brand
names, trade names, trademarks or service marks of other companies, and these
brand names, trade names, trademarks or service marks are the property of
those other companies.


                                     (iv)


<PAGE>


                             CAUTIONARY STATEMENT
                     REGARDING FORWARD-LOOKING INFORMATION

     We make forward-looking statements in this annual report that are subject
to risks and uncertainties. These statements are based on the beliefs and
assumptions of our management, and on information currently available to us.
Forward-looking statements include statements regarding the intent, belief or
current expectations of AmBev or its directors or executive officers with
respect to:

     o the declaration or payment of dividends;

     o the direction of future operations;

     o the implementation of principal operating strategies, including
       potential acquisition or joint venture transactions or other investment
       opportunities;

     o the implementation of AmBev's financing strategy and capital
       expenditure plans;

     o the factors or trends affecting AmBev's financial condition, liquidity
       or results of operations; and

     o the implementation of the measures required under AmBev's performance
       agreement entered into with CADE.

     Forward-looking statements also include the information concerning
possible or assumed future results of operations of AmBev set forth under
"Item 4--Information on the Company Business Overview" and "Item 8--Financial
Information" and statements preceded by, followed by, or that include, the
words "believes", "may", "will", "continues", "expects", "anticipates",
"intends", "plans", "estimates" or similar expressions.

     Forward-looking statements are not guarantees of performance. They
involve risks, uncertainties and assumptions because they relate to future
events and therefore depend on circumstances that may or may not occur in the
future. The future results and shareholder values of AmBev may differ
materially from those expressed in or suggested by these forward-looking
statements. Many of the factors that will determine these results and values
are beyond our ability to control or predict. Investors are cautioned not to
put undue reliance on any forward-looking statements.

     Investors should understand that the following important factors, in
addition to those discussed in this annual report, could affect the future
results of AmBev and could cause results to differ materially from those
expressed in such forward-looking statements:

     o general economic conditions, such as the rates of economic growth in
       the principal geographic markets of AmBev or fluctuations in exchange
       rates;

     o industry conditions, such as the strength of product demand, the
       intensity of competition, pricing pressures, the introduction of new
       products by AmBev, the introduction of new products by competitors,
       changes in technology or in the ability of AmBev to obtain products and
       equipment from suppliers without interruption and at reasonable prices,
       and the financial conditions of the customers and distributors of
       AmBev; and

     o operating factors, such as the continued success of manufacturing and
       distribution activities of AmBev and the consequent achievement of
       efficiencies and the continued success of product development.


                                      (v)


<PAGE>


                                    PART I

Item 1. Identity of Directors, Senior Management and Advisers

      Not Applicable.


Item 2. Offer Statistics and Expected Timetable

      Not Applicable.


Item 3. Key Information

                        AMBEV'S SELECTED FINANCIAL DATA

     The following financial information of AmBev is only a summary and should
be read in conjunction with, and is qualified in its entirety by reference to,
the audited annual consolidated financial statements of AmBev and the related
notes which are included in this annual report.

     AmBev's selected historical financial data set forth below as of and for
each of the years ended December 31, 2000, 1999, 1998, 1997 and 1996 have been
derived from AmBev's consolidated financial statements, which have been
audited by PricewaterhouseCoopers Auditores Independentes, Brazilian
independent accountants. AmBev's financial statements have been prepared in
U.S. dollars in accordance with U.S. GAAP. PricewaterhouseCoopers Auditores
Independentes based its report on AmBev's consolidated financial statements as
of and for the year end December 31, 1999, insofar as it relates to the
amounts included for Antarctica, on the report of Deloitte Touche Tohmatsu
Auditores Independentes, Brazilian independent accountants.

     AmBev's U.S. GAAP audited annual consolidated financial statements as of
December 31, 2000 and 1999 and for each of the three years ended December 31,
2000 are included in this annual report.

     Prior to July 1, 1999, the date of the controlling shareholders'
contribution, AmBev had no material assets, liabilities or operations.
However, for accounting purposes AmBev is treated as the successor to Brahma.
As a result, the financial statements of AmBev as of December 31, 1998, 1997
and 1996 and for the years ended December 31, 1998, 1997 and 1996 are
substantially the same as the financial statements of Brahma as of such dates
and for such periods. As described below, the financial statements of AmBev as
of any date and for any period ending after June 30, 1999, reflect the
combination of Brahma and Antarctica.

     AmBev obtained voting control of Antarctica on July 1, 1999. However,
AmBev was subject to interim measures imposed by CADE limiting AmBev's ability
to integrate the operations of Brahma and Antarctica. See "The Combination and
Brazilian Antitrust Approval". As a result of those interim measures, AmBev
was not deemed to have a controlling financial interest in Antarctica for
accounting purposes. Consequently, AmBev accounted for its interest in
Antarctica under the equity method for the period from July 1, 1999 to March
31, 2000. On April 7, 2000, CADE effectively approved AmBev's acquisition of
control of Antarctica and those interim measures ceased to apply, thereby
allowing AmBev to consolidate Antarctica for accounting purposes. Accordingly,
as of April 1, 2000, Antarctica has been consolidated in AmBev's financial
statements. See "Item 5--Operating and Financial Review and
Prospects--Operating Results--Accounting Aspects of the Combination".

     Pursuant to our performance agreement with CADE, we sold Antarctica's
Bavaria beer brand and five breweries on November 6, 2000. See "The
Combination and Brazilian Antitrust


                                       1


<PAGE>


Approval--Brazilian Antitrust Approval". Except as otherwise stated, however,
historical operating and financial data of AmBev and Antarctica as of any date
ended prior thereto or for any period ending on or before December 31, 2000,
include the assets, operations and liabilities associated with Bavaria.

     On October 27, 2000, we restructured our employee benefit programs by
merging the Brahma Welfare Foundation into the Zerrenner Foundation. Prior to
June 30, 1999, the Zerrenner Foundation, a trust, was the principal
shareholder of Antarctica and is currently one of the three controlling
shareholders of AmBev and is a party to the shareholders' agreement described
in "Item 7--Major Shareholders and Related Party Transactions--Major
Shareholders--AmBev Shareholders' Agreement". Following the merger the
Zerrenner Foundation's share ownership of AmBev increased to 22.7% of the
common shares and 10.6% of the total shares of AmBev. We have consolidated the
net assets of the Zerrenner Foundation on our balance sheet as of December 31,
2000. A substantial part of the assets of the Zerrenner Foundation consist of
shares of AmBev. Because we have consolidated the assets of the Zerrenner
Foundation, we have included the AmBev shares owned by the Zerrenner
Foundation as treasury shares, rather than as outstanding shares, on our
balance sheet, thereby reducing the number of our outstanding shares and
increasing our earnings or loss per share in 2000 and thereafter.

     For the effects of the significant devaluation of the real on the
balances reported in U.S. dollars for the year ended December 31, 1999, see
"Item 3--Key Information--Exchange Rate Information-- Devaluation of the
Real".

<TABLE>
<CAPTION>
                                                       As of or for the year ended December 31,
                                          ------------------------------------------------------------------------------

                                           2000 (1)          1999 (1)            1998             1997           1996
                                          ---------        ----------         ----------       ----------     ----------
                                   (in thousands, except for per share amounts, number of shares and other operating data)
<S>                                        <C>              <C>               <C>                <C>             <C>
Statement of Operations Data:

Net sales..........................      US$2,635,236     US$1,775,943       US$2,669,338    US$ 2,444,103    US$ 2,299,992
Cost of sales......................        (1,444,838)      (1,076,276)        (1,608,340)     (1,393,395)       (1,283,881)
                                         ------------     ------------       ------------   -------------     -------------
Gross profit.......................         1,190,398          699,667          1,060,998       1,050,708         1,061,111
Selling and marketing expenses.....          (384,367)        (263,839)          (573,759)       (426,222)         (353,904)
General and administrative
   expenses........................          (313,059)        (200,348)          (281,326)       (338,298)         (275,483)
Other operating income (expense),
   net.............................           (58,169)         (51,341)             3,476           1,409            31,789
                                         ------------     ------------       ------------   -------------     -------------
Operating income...................           434,803          184,139            209,389         287,597           418,513
Financial income...................           164,315          364,829            198,636         136,992           132,205
Financial expenses.................          (310,212)        (442,245)          (289,504)       (142,318)          (97,248)
Other non-operating income
   (expense), net..................              (901)          (8,448)            14,994          40,310            25,895
                                         -------------    ------------       ------------   -------------     -------------
Income before income tax, equity
   in affiliates and minority interest        288,005           98,275            133,515         322,581           479,365
Income tax benefit (expense):
   Current.........................          (102,037)          37,986             90,526         107,696          (156,152)
   Deferred........................           489,277            3,402              2,170          (7,806)           64,415
                                         ------------     ------------       ------------   -------------     -------------
Income before equity in affiliates
   and minority interest...........           675,245          139,663            226,211         422,471           387,628
Equity in earnings (losses) of
   affiliates......................            11,678            5,404              2,962         (28,138)            5,648
Equity in losses of Antarctica(1)..           (49,879)        (179,116)
Minority interest..................           (14,202)           3,498              9,404           1,133            (4,700)
                                         ------------     ------------       ------------   -------------     -------------
Net income (loss)..................      US$  622,842     US$  (30,551)      US$  238,577   US$   395,466     US$   388,576
                                         ============     ============       ============   =============     =============
</TABLE>


                                       2


<PAGE>

<TABLE>
<CAPTION>

                                                             As of or for the year ended December 31,
                                          ------------------------------------------------------------------------------

                                           2000 (1)          1999 (1)            1998             1997           1996
                                          ---------        ----------         ----------       ----------     ----------
                                   (in thousands, except for per share amounts, number of shares and other operating data)
<S>                                       <C>              <C>                <C>              <C>            <C>
Earnings (loss) per thousand shares
(2)(3)(4)(5)                       :
   Basic
     Preferred shares..............       US$ 17.85         US$(0.92)           US$7.32         US$11.58         US$11.36
     Common shares.................           16.23            (0.92)              6.65            10.53            11.36
   Diluted
     Preferred shares..............           17.18            (0.88)              6.94            11.20            11.02
     Common shares.................           15.62            (0.88)              6.31            10.19            11.02

Earnings (loss) per ADS: (2)(3)
   Basic
     Preferred ADSs................       US$ 0.179         US$(0.09)           US$0.07          US$0.12          US$0.11
     Common ADSs...................           0.162            (0.09)              0.07             0.11             0.11
   Diluted
     Preferred ADSs................           0.172            (0.09)              0.07             0.11             0.11
     Common ADSs...................           0.156            (0.09)              0.06             0.10             0.11

Weighted average number of
preferred and common shares
outstanding: (2)(3)
   Basic
     Preferred Shares..............       21,919,724       21,173,565         21,733,635       23,110,875       22,763,630
     Common Shares.................       14,265,323       11,949,367         11,983,100       12,140,015       11,432,285
   Diluted
     Preferred Shares..............       23,090,525       22,384,145         23,058,784       24,128,895       23,701,055
     Common Shares.................       14,475,271       12,206,392         12,433,243       12,284,655       11,573,505
</TABLE>


                                       3


<PAGE>

<TABLE>
<CAPTION>


                                                             As of or for the year ended December 31,
                                         -------------------------------------------------------------------------------

                                           2000 (1)        1999 (1)              1998             1997           1996
                                         ----------      ------------      -------------      -----------     ----------
                                   (in thousands, except for per share amounts, number of shares and other operating data)

<S>                                          <C>            <C>                 <C>               <C>              <C>
Balance Sheet Data:(6)
Cash, cash equivalents and trading
   securities (7)..................      US$  513,462    US$   929,431     US$    880,802     US$  780,766    US$   791,251
Total current assets (8)...........         1,413,281        1,447,515          1,590,272        1,456,679        1,353,743
Investments (9)....................            36,829           52,325             42,106           42,266           66,904
Property, plant and equipment, net.         1,472,545        1,022,786          1,739,745        1,888,663        1,602,734
Goodwill and intangible assets, net           270,637           54,034             83,856           48,649           17,934
Deferred income tax - long term (10)          531,054           62,603             69,841           72,493           70,855
Total assets.......................         3,971,796        2,850,499          3,731,568        3,701,220        3,244,667
Short-term debt (11)...............           618,138          574,369            733,511          593,331          415,298
Total current liabilities..........         1,366,066        1,034,718          1,280,308        1,181,077          939,819
Long-term debt (12)................           405,129          465,855            727,770          677,992          465,417
Accrued liability for legal
   proceedings.....................           310,979          163,309            208,033          312,790          457,613
Sales tax deferrals and other tax
   credits.........................           308,391          296,742            341,239          218,216           88,020
Total long-term liabilities........         1,115,385          958,507          1,315,474        1,218,936        1,045,343
Minority interest..................           222,449           20,383             35,377           41,012           52,976
Shareholders' equity...............         1,267,896          836,891          1,100,409        1,260,195        1,206,529

Other Financial Information:

Net working capital (13)...........       US$  47,215     US$  412,797      US$   309,964     US$  275,602     US$  413,924
Cash dividends paid (14)...........          (149,085)         (97,299)          (104,450)        (101,402)        (463,528)
Depreciation and amortization (15).           258,173          234,903            263,354          243,036          168,616
Capital expenditures (16)..........          (145,666)        (108,451)          (249,105)        (467,508)        (530,401)
Operating cash flows--generated.....          514,832          621,033            477,004          469,727          692,659
Investing cash flows--(used)........          (53,780)         (76,628)          (214,576)        (429,684)        (511,089)
Financing cash flows--(used)........         (950,155)        (281,397)          (128,492)         (33,906)        (109,945)

Other Operating Data:

Total production capacity--
   beer (17).......................      94.4 million hl  64.4 million hl    62.0 million hl  56.9 million hl  51.7 million hl
Total production capacity--
   soft drink (17).................      36.6 million hl  27.0 million hl    27.0 million hl  27.0 million hl  13.0 million hl
Total beer volume sold (18)........      64.8 million hl  43.2 million hl    42.5 million hl  41.3 million hl  38.3 million hl
Total soft drink volume sold (18)..      17.2 million hl   8.5 million hl    12.1 million hl   9.4 million hl   8.8 million hl
Number of employees  (19)..........               18,172            9,416             10,708           10,955            9,987
Productivity--hectoliters per
   production employee (20)........              7,556hl         8,776 hl           8,694 hl         6,289 hl         5,222 hl
</TABLE>


(1)  Antarctica was accounted for under the equity method, taking into account
     the purchase accounting adjustments, as of July 1, 1999 through March 31,
     2000. From July 1, 1999 through September 15, 1999, AmBev owned 87.92% of
     the total outstanding capital stock of Antarctica. From and after
     September 15, 1999, AmBev owned all of the outstanding capital stock of
     Antarctica. From April 1, 2000, Antarctica has been consolidated in
     AmBev's financial statements.

(2)  All share and per share data have been adjusted to give effect,
     retroactively, to AmBev's five-for- one split of its common and preferred
     shares effective October 23, 2000. Because AmBev did not split its ADSs,
     the ADSs which prior to the stock split had represented 20 common or
     preferred


                                       4


<PAGE>


     shares, represented 100 common or preferred shares following the stock
     split and, consequently, were generally not affected by the stock split.

(3)  We have consolidated the net assets of the Zerrenner Foundation, one of
     our principal shareholders, on our balance sheet as of December 31, 2000.
     The Zerrenner Foundation was not consolidated for any prior periods;
     however, the Brahma Welfare Foundation was consolidated for all periods
     included herein. The Zerrenner Foundation provides medical, dental,
     educational and social assistance benefits to current and retired AmBev
     employees and their families. As a result of our consolidating the net
     assets of the Zerrenner Foundation, the AmBev shares owned by the
     Zerrenner Foundation are treated as treasury shares, rather than
     outstanding shares, on our balance sheet, thereby reducing the number of
     our outstanding shares. One of the effects of our treating the AmBev
     shares owned by the Zerrenner Foundation as treasury shares is to reduce
     the number of the weighted average number of outstanding shares used in
     calculating our earnings or loss per share. That results in an increase
     of our earnings or loss per share. At December 31, 2000, there were
     22,144,351,240 and 12,328,741,785 AmBev preferred and common shares,
     respectively, outstanding, excluding shares owned by the Zerrenner
     Foundation. At December 31, 2000, the Zerrenner Foundation owned
     471,666,665 and 3,621,305,410 AmBev preferred and common shares,
     respectively. Thus, treating the AmBev shares owned by the Zerrenner
     Foundation as treasury shares (but in 2000 excluding the shares
     previously owned by the Brahma Welfare Foundation) resulted in a
     reduction in 2000 of the weighted average number of outstanding preferred
     and common shares of 0.2% and 2.6%, respectively. However, the Zerrenner
     Foundation was consolidated for purposes of our earnings or loss per
     share calculation for only two months in 2000. Therefore, in future
     periods the effect of the consolidation of the Zerrenner Foundation on
     our earnings or loss per share will be much more significant. For all
     other purposes, however, including the right to receive dividends and the
     right to vote, the AmBev shares owned by the Zerrenner Foundation are
     treated the same way any other shares are treated. See "Item 5--Operating
     and Financial Review and Prospects--Operating Results--Consolidation of
     the Zerrenner Foundation and Effect on Earnings Per Share."

(4)  The information is provided per thousand shares because AmBev common and
     preferred shares are generally traded on the Brazilian stock exchange in
     blocks of one thousand shares.

(5)  Earnings per share are calculated dividing the net income by the weighted
     average number of common and preferred shares outstanding during the
     relevant periods. AmBev's preferred shares are entitled to dividends 10%
     greater than the dividends paid to common shares.

(6)  Because we elected to present our financial statements in U.S. dollars,
     our functional currency prior to 1998 was required to be the U.S. dollar
     under U.S. Statement of Financial Accounting Standards (SFAS) No. 52
     "Foreign Currency Translation". However, beginning in 1998, we changed
     our functional currency to the real. We made this change because the
     Brazilian economy was no longer highly inflationary for purposes of SFAS
     52 since the increase in the general price index was measured at less
     than 100% over the previous three years. Therefore, under SFAS No. 52, we
     determined that our functional currency, which is typically the currency
     in which a company generates and expends cash, should be the real. See
     Note 2 to AmBev's consolidated financial statements. Accordingly, as of
     January 1, 1998, we translated the U.S. dollar amounts of non-monetary
     assets and liabilities into reais at the then-current exchange rate and
     those amounts became the new accounting bases for such assets and
     liabilities.

(7)  Excludes the Zerrenner Foundation restricted cash of US$34,651 thousand
     at December 31, 2000.

(8)  Includes the current portion of deferred income tax in the amount of
     US$10,104 thousand, US$7,367 thousand, US$7,639 thousand, US$10,197
     thousand, and US$7,316 thousand for the years ended December 31, 2000,
     1999, 1998, 1997, and 1996, respectively.


                                       5


<PAGE>


(9)  Includes investment in Antarctica of US$24,482 thousand as of December
     31, 1999.

(10) The current portion of the deferred income tax is included in current
     assets.

(11) Includes short-term debt and the current portion of long-term debt.

(12) Includes only the long-term portion of long-term debt.

(13) Represents total current assets less total current liabilities.

(14) Includes dividends, interest attributable to shareholders' equity
     (including withholding tax paid by AmBev in respect thereof), and in
     2000, returns of capital of US$61,105 thousand. Distributions in the
     first nine months of 2000 were made in the form of a return of capital
     rather than in the form of dividends or interest attributable to
     shareholders' equity because, prior to the completion of the Brahma
     conversion, AmBev did not have sufficient retained earnings to pay these
     amounts as dividends or interests attributable to shareholders' equity.

(15) Includes depreciation of property, plant and equipment and amortization
       of goodwill and intangible assets.

(16) Represents cash expenditures for property, plant and equipment.

(17) Represents available production capacity of Brahma and its subsidiaries
     (and not Antarctica or its subsidiaries) at the end of each period ending
     on or before December 31, 1999, and thereafter represents the available
     production capacity of AmBev and its respective subsidiaries; including
     Antarctica (hl is the abbreviation for hectoliters).

(18) Represents volumes of Brahma and its subsidiaries (and not Antarctica or
     its subsidiaries) for each period ending on or before December 31, 1999,
     and thereafter represents full-year volumes of AmBev and its respective
     subsidiaries (including Antarctica as of April 1, 2000).

(19) Includes all production- and non-production-related employees of Brahma
     and its subsidiaries at the end of each period ending on or before
     December 31, 1999, and thereafter includes all production- and
     non-production-related employees of AmBev and its respective
     subsidiaries.

(20) Calculated by dividing the total volume of beer and soft drinks sold by
     the number of employees involved in the production processes at the end
     of each period. Volumes used represent those of Brahma and its
     subsidiaries (and not Antarctica or its subsidiaries) for each period
     ending on or before December 31, 1999, and thereafter represent full-year
     volumes of AmBev and its respective subsidiaries (including Antarctica as
     of April 1, 2000).


                                       6


<PAGE>


                                   DIVIDENDS

Dividend Policy

     AmBev intends to pay dividends annually to its shareholders; however, the
timing and amount of future dividend payments, if any, will depend upon
various factors the board of directors of AmBev considers relevant, including
the earnings and the financial condition of AmBev. AmBev's by-laws provide for
a mandatory dividend of 27.5% of its annual net income, if any, as determined
and adjusted under accounting principles set forth under Brazilian corporation
law (adjusted income). The mandatory dividend includes amounts paid as
interest attributable to shareholders' equity, which is equivalent to a
dividend but is a more tax efficient way to distribute earnings because they
are generally deductible by the company for Brazilian income tax purposes.
However, shareholders (including holders of ADSs) have to pay Brazilian
withholding tax on the amounts received as interest attributable to
shareholders' equity, whereas no such payment is required in connection with
dividends received. Withholding tax is usually paid by Brazilian companies on
behalf of their shareholders.

     Adjusted income may be capitalized, used to absorb losses or otherwise
appropriated as allowed under Brazilian corporation law; therefore, any
adjusted income may no longer be available to be paid as dividends. AmBev may
also not pay dividends to its shareholders in any particular fiscal year, upon
the determination by the board of directors that such distributions would be
inadvisable in view of AmBev's financial condition. Any such dividends not
distributed would be allocated to a special reserve account for future payment
to shareholders, unless it is used to offset subsequent losses. See "--Risk
Factors--Factors Relating to the AmBev Shares and ADSs--AmBev shareholders may
not receive any dividends". Any dividends payable on AmBev's preferred shares
must be at least 10% greater than those payable on AmBev's common shares. See
"Item 10--Additional Information--Memorandum and Articles of
Association--Reserves and Dividends--Dividend Preference of Preferred Shares".

     For further information on Brazilian corporation law provisions relating
to required reserves and payment of dividends on interest attributable to
shareholders' equity, as well as specific rules applying to the payment of
dividends by AmBev, see "Item 10--Additional Information--Memorandum and
Articles of Association--Reserves and Dividends".

AmBev--Dividends and Interest Attributable to Shareholders' Equity

     The following table shows the dividends paid by AmBev's predecessor
Brahma, to its preferred and common shareholders from 1996 through September
15, 2000 and by AmBev to its preferred and common shareholders since September
15, 2000 in reais and in U.S. dollars translated from reais at the commercial
exchange rate as of the date of payment. The amounts beginning in 1997 include
interest attributable to shareholders' equity, net of withholding tax, and
return of capital. See "Item 10--Additional Information--Memorandum and
Articles of Association--Interest Attributable to Shareholders' Equity".
<TABLE>
<CAPTION>
<S>                                <C>                      <C>                      <C>
           Earnings                                         Reais per            U.S. dollar equivalent per
           generated              First payment date     thousand shares   thousand (1) shares at payment date (2)
           ---------              ------------------     ---------------   ---------------------------------------

Extraordinary..................     March 25, 1996           11.40               (preferred and common)  11.54
Second half 1995...............       May 2, 1996             1.04               (preferred and common)   1.05
First half 1996................   September 26, 1996          0.91               (preferred and common)   0.89
Second half 1996...............     March 21, 1997            1.27               (preferred and common)   1.20
First half 1997................     October 9, 1997           1.61               (preferred)              1.47
                                                              1.46               (common)                 1.33
Second half 1997...............       May 7, 1998             1.73               (preferred)              1.51
                                                              1.57               (common)                 1.37
</TABLE>


                                       7


<PAGE>


<TABLE>
<CAPTION>
<S>                                     <C>                 <C>                      <C>
           Earnings                                         Reais per            U.S. dollar equivalent per
           generated              First payment date     thousand shares   thousand (1) shares at payment date (2)
           ---------              ------------------     ---------------   ---------------------------------------

First half 1998................     October 8, 1998         1.32                (preferred)              1.12
                                                            1.20                (common)                 1.01
Second half 1998...............      April 5, 1999          2.37                (preferred)              1.37
                                                            2.16                (common)                 1.25
First half 1999................      July 20, 1999          1.58                (preferred)              0.88
                                                            1.44                (common)                 0.80
Second half 1999(3)............     March 15, 2000          2.96                (preferred)              1.70
                                                            2.69                (common)                 1.54
Second half 2000...............    November 30, 2000        2.38                (preferred)              1.22
                                                            2.38                (common)                 1.22
</TABLE>

-----------------------

(1)  The information is provided per thousand shares because AmBev common and
     preferred shares are generally traded on the Sao Paulo Stock Exchange in
     blocks of one thousand.

(2)  The amounts set forth above are amounts actually received (as adjusted to
     give effect retroactively to AmBev's common and preferred share
     five-for-one stock split effective October 23, 2000) by shareholders,
     which are net of withholding tax. The financial statements present the
     amounts actually disbursed, including the withholding tax on interest on
     shareholders' equity, which was paid on behalf of its shareholders. The
     dividends per thousand shares set forth above are calculated based on the
     number of shares outstanding at the date the distributions were declared
     (as adjusted to give effect retroactively to AmBev's common and preferred
     share five-for-one stock split effective October 23, 2000) . Dividends
     per thousand shares in the financial statements are calculated based on
     the weighted average number of shares for the period in which dividends
     were declared.

(3)  On March 23, 2000, AmBev distributed R$1.88 (US$1.03) per common and
     preferred shares to its shareholders as a return of capital.


                                       8


<PAGE>


                           EXCHANGE RATE INFORMATION

     There are two principal legal foreign exchange markets in Brazil: the
commercial market and the floating market. The commercial market is reserved
primarily for foreign trade transactions and transactions that generally
require prior approval from the Central Bank, such as payments of and with
respect to debt instruments, the purchase and sale of registered investments
by foreign persons and related remittances of funds abroad. Exchanges of
foreign currency in the commercial market may be carried out only through
Brazilian banks authorized by the Central Bank to buy and sell currency in
that market. The floating market applies to specified transactions that do not
require the Central Bank's express prior approval. Prior to the implementation
of the Real Plan in 1994, the commercial market rate and the floating market
rate differed significantly at times. Since the introduction of the real, the
two rates have not differed significantly and as of February 1, 1999, the
Central Bank unified the two legal exchange rates, while maintaining separate
regulations for each of the commercial and floating markets. We can not assure
you that there will not be further changes in the applicable regulations which
may result in future significant differences between the two rates. Both the
commercial market and floating market rates are freely negotiated but may be
influenced by the Central Bank.

Devaluation of the Real

     From its introduction on July 1, 1994 through March 1995, the real
appreciated significantly against the U.S. dollar. On March 6, 1995, in an
effort to address concerns about the overvaluation of the real relative to the
U.S. dollar, the Central Bank introduced new exchange rate policies that
established a band within which the real/U.S. dollar exchange rate could
fluctuate, and announced that it would buy or sell U.S. dollars whenever the
rate approached the upper or lower limits of the band. From March 1995 through
January 1999, the Central Bank allowed the gradual devaluation of the real
against the U.S. dollar. Responding to downward pressure on the real, on
January 13, 1999, the Central Bank widened the foreign exchange rate band and
on January 15, 1999, the Central Bank allowed the real to float freely. The
real devalued to a low of R$2.165 per US$1.00 on March 3, 1999, but
subsequently appreciated to R$1.79 per US$1.00 on December 31, 1999,
representing a net devaluation of 32.4% during 1999.

      In 2000, the net devaluation of the real was 8.5 %. While the value of
the real was relatively stable during most of the year, beginning in the
fourth quarter of 2000, the real began to depreciate more significantly.
Additionally, in the first five months of 2001, the devaluation of the real
continued to accelerate. The net devaluation of the real for the period from
January 1, 2001 to May 31, 2001 was approximately 20%. We believe the recent
devaluation has resulted largely from the continuing economic instability in
Argentina, but other concerns relating to the Brazilian economy itself, such
as the recently predicted power shortages, may also have affected the
valuation of the real. See "--Risk Factors--Factors Related to
Brazil--Substantial exchange rate fluctuations could harm AmBev and reduce the
market value of our securities" and "Item 4--Information on the
Company--Brazilian Beverage Industry Overview". We cannot assure you that the
real will not continue to devalue in the future. On May 31, 2001, the
commercial market rate for the purchase U.S. dollars was R$2.36 to US$1.00.

     The following tables set forth commercial market rates for the purchase
of U.S. dollars for the periods indicated.


                                       9


<PAGE>


                          Annual Exchange Rates of Reais per US$1.00

                         2000       1999      1998      1997      1996
                         ----       ----      ----      ----      ----

Low...................  R$1.7234  R$1.2075  R$1.1165  R$1.0395  R$0.9726
High..................    1.9847    2.2000    1.2087    1.1164    1.0407
Average(1)............    1.8295    1.8566    1.1611    1.0787    1.0080
Period End............    1.9554    1.7890    1.2087    1.1164    1.0394
---------------

Source:  Central Bank of Brazil

(1) Represents the average of the month-end exchange rates during the relevant
    period.



                          Recent Monthly Exchange Rates of Reais per US$1.00
                          --------------------------------------------------

                                                      2001

                        ------------------------------------------------------
                            May        April     March     February   January
                            ---       ------     -----     --------   -------

Low.....................  R$2.1957   R$2.1384   R$2.0208   R$1.4739   R$1.9357
High....................    2.3600     2.3011     2.1616     2.0452     1.9753

---------------

Source:  Central Bank of Brazil

     Brazilian law provides that, whenever there is a serious imbalance in
Brazil's balance of payments or serious reasons to expect such an imbalance,
temporary restrictions may be imposed on remittances of foreign capital
abroad. We cannot assure you that temporary restrictions will not be imposed
by the Brazilian government in the future.


                                      10


<PAGE>


                               EXCHANGE CONTROLS

     There are no restrictions on ownership of the ADSs or the preferred
shares by individuals or legal entities domiciled outside Brazil.

     The right to convert dividend payments, interest attributable to
shareholders' equity payments and proceeds from the sale of preferred or
common shares into foreign currency and to remit such amounts outside Brazil
is subject to exchange control restrictions and foreign investment legislation
which generally requires, among other things, that the relevant investments be
registered with the Central Bank. Restrictions on the remittance of foreign
capital abroad could hinder or prevent Banco Itau S.A. (the custodian) or
holders who have exchanged AmBev's ADSs for shares of AmBev, from converting
dividend distributions, interest on shareholders' equity or the proceeds from
any sale of shares of AmBev into U.S. dollars and remitting such U.S. dollars
abroad. Holders of AmBev ADSs could be adversely affected by delays in or
refusal to grant any required governmental approval for conversions of real
payments and remittances abroad.

     Under Brazilian law relating to foreign investment in the Brazilian
capital markets (Foreign Investment Regulations), foreign investors registered
with the Brazilian Securities Commission (CVM) and acting through authorized
custody accounts managed by local agents may buy and sell shares on Brazilian
stock exchanges without obtaining separate certificates of registration for
each transaction. Foreign investors that acquire shares listed and traded on
Brazilian stock exchanges are also generally entitled to favorable tax
treatment. See "Item 10--Additional Information--Taxation--Brazilian Tax
Considerations".

     Foreign investors may register their investment under Law 4,131/62 or
Resolution No. 2,689/00 of the National Monetary Council. Registration under
Resolution No. 2,689 affords favorable tax treatment to foreign investors who
are not resident in a tax haven, as defined by Brazilian tax laws. See "Item
10-- Additional Information--Taxation--Brazilian Tax Considerations".

     Under Resolution No. 2,689, foreign investors may invest in almost all
financial assets and engage in almost all transactions available in the
Brazilian financial and capital markets, provided that certain requirements
are fulfilled. In accordance with Resolution No. 2,689, the definition of
foreign investor includes individuals, legal entities, mutual funds and other
collective investment entities, domiciled or headquartered abroad.

     Under Resolution No. 2,689, a foreign investor must:

o    appoint at least one representative in Brazil, with powers to perform
     actions relating to its investment;

o    appoint an authorized custodian in Brazil for its investments;

o    register as a foreign investor with the CVM; and

o    register its foreign investment with Brazilian Central Bank.

     Securities and other financial assets held by a Resolution No. 2,689
investor must be registered or maintained in deposit accounts or under the
custody of an entity duly licensed by the Brazilian Central Bank or the CVM.
In addition, any transfer of securities held under Resolution No. 2,689 must
be carried out in the stock exchanges or through organized over-the-counter
markets licensed by the CVM, except for transfers resulting from a corporate
reorganization, occurring upon the death of an investor by operation of law or
will or as a consequence of the delisting of the relevant shares from a stock
exchange and the cancellation of the registration with the CVM.


                                      11


<PAGE>


     Pursuant to the certificates of registration obtained by AmBev from the
Central Bank in the name of the Bank of New York with respect to the AmBev
ADSs to be maintained by the custodian (Banco Itau S.A.) on behalf of the Bank
of New York, the custodian and The Bank of New York will be able to convert
dividends and other distributions with respect to the AmBev shares represented
by AmBev ADSs into foreign currency and remit the proceeds outside of Brazil.
In the event that a holder of AmBev ADSs exchanges such ADSs for AmBev shares
such holder will be entitled to continue to rely on The Bank of New York's
certificate of registration for only five business days after such exchange,
following which such holder must obtain its own certificate of registration.
Any such holder may not be able to obtain and remit abroad U.S. dollars or
other hard currencies upon the disposition of the shares or distributions with
respect to such disposition, unless such holder qualifies under the Foreign
Investment Regulations or obtains its own certificate of registration, and
such holder generally will be subject to less favorable Brazilian tax
treatment than a holder of AmBev ADSs. See "Item 10--Additional Information--
Taxation-Brazilian Tax Considerations".

     Under current legislation, the Brazilian government may impose temporary
restrictions on remittances of foreign capital abroad in the event of a
serious imbalance or an anticipated serious imbalance of Brazil's balance of
payments. For approximately six months in 1989 and early 1990, the Brazilian
government froze all dividend and capital repatriations held by the Central
Bank that were owed to foreign equity investors in order to conserve Brazil's
foreign currency reserves. These amounts were subsequently released in
accordance with Brazilian government directives. We can not assure you that
the Brazilian government will not impose similar restrictions on foreign
repatriations in the future. See "--Risk Factors--Controls and restrictions on
foreign currency remittance could harm the ability of AmBev to make dividend
payments".


                                      12


<PAGE>


                                 RISK FACTORS

         Investors, holders and prospective purchasers of ADSs and shares of
AmBev should, in addition to paying due regard to the Cautionary Statement
Regarding Forward-Looking Information noted above, also carefully consider all
of the information set forth in this annual report. In particular, you should
consider the special features applicable to an investment in Brazil and
applicable to an investment in AmBev, including those set forth below. In
general, investing in the securities of issuers in emerging market countries,
such as Brazil, involves a higher degree of risk than investing in the
securities of issuers in the United States.

         For purposes of this section, when we state that a risk, uncertainty
or problem may, could or would have an "adverse effect" on AmBev, we mean that
the risk, uncertainty or problem may, could or would have an adverse effect on
the business, financial condition, liquidity, results of operations or
prospects of AmBev, except as otherwise indicated or as the context may
otherwise require. You should view similar expressions in this section as
having a similar meaning.

Factors Relating to AmBev

     We are subject to Brazilian antitrust regulations

     We have a substantial beer market share in our Brazilian beer markets and
we are subject to regulation under Brazilian antitrust rules. In addition, in
connection with the combination of Brahma and Antarctica, we entered into a
performance agreement with the Brazilian antitrust authorities. See "The
Combination and Brazilian Antitrust Approval--Brazilian Antitrust Approval".
We are also party to several antitrust legal proceedings. See "Item
8--Financial Information--Legal Proceedings--Antitrust Matters". We cannot
assure you that Brazilian antitrust regulation will not affect our business in
the future.

     Increases in taxes on beverage products in Brazil may affect our results
and profitability

     Increases in Brazil's already high levels of taxation could adversely
affect our profitability. Increases in taxes on beverage products usually
result in higher beverage prices for consumers. Higher beverage prices
generally result in lower levels of consumption and, therefore, lower net
sales. Lower net sales result in lower margins since some of our costs are
fixed and thus do not vary significantly based on the level of production. We
cannot assure you that the government will not increase current tax levels.

Factors Relating to Brazil

     Instability in the Brazilian economy and Brazilian government
intervention could affect our profitability and financial condition

     In the past, the Brazilian economy has been subject to prolonged periods
of extremely high inflation, currency and price instability and severe
recessions. The Brazilian government has historically taken a number of
actions including, for example, wage and price controls, currency
devaluations, capital controls, import restrictions and shifts in taxes and
tax levels to address economic problems.

     Economic instability generally has an adverse effect on the demand for
our products. In addition, actions taken by the government to address economic
problems have in the past, and also may in the future, also adversely affect
our business.


                                      13


<PAGE>


     Substantial exchange rate fluctuations could harm AmBev and reduce the
market value of our securities

     Substantially all of our revenues are in reais. However, a significant
portion of our debt is denominated in or indexed to U.S. dollars. In addition,
a significant portion of our operating expenses, in particular those related
to hops, malt and aluminum, are also denominated in or linked to U.S. dollars.
Therefore, the devaluation of the real increases our financial expenses and
operating costs and could affect our ability to meet our foreign currency
obligations. Our current policy is to hedge substantially all of our
dollar-denominated debt, although not our dollar-denominated or linked
operating expenses, against adverse changes in foreign exchange rates.
However, we can not assure you that such hedging will be possible at all times
in the future. In addition, fluctuations in the value of the real may reduce
the market value of our shares and ADSs. See "--Exchange Rate
Information--Devaluation of the Real".

     Although we seek to limit our exchange rate exposure by entering into
foreign exchange and interest rate swaps, raw material purchases in foreign
currencies nonetheless are subject to a level of exchange rate risk.

     Electric power shortages currently faced by Brazil could adversely affect
us

     The Brazilian government have announced that it may be forced to
introduce measures for electric power rationing in the upcoming months due to
reduced hydroelectric generation caused by recent droughts.

     Although we believe that the shortage of energy will not affect our
operations, financial condition and results of operations, we cannot assure
you that future governmental rationing measures would not adversely affect us.

     U.S. investors may not be able to effect service of process upon, or to
enforce judgments against, AmBev

     AmBev is organized under the laws of the Federative Republic of Brazil.
All of the directors and executive officers of AmBev and the experts named in
this annual report are residents of countries other than the United States.
All or a substantial portion of the assets of such non-resident persons and of
AmBev are located outside the United States. As a result, it may not be
possible for investors to effect service of process within the United States
upon such persons or AmBev, or to enforce against them in U.S. courts
judgments obtained in such courts based upon civil liability provisions of the
Federal securities laws of the United States or otherwise.

Factors Relating to AmBev Shares and ADSs

     The relative volatility and illiquidity of the Brazilian securities
markets may substantially limit your ability to sell the AmBev shares at the
price and time you desire

     Investing in securities involving emerging markets, such as Brazil,
involves greater risk than investing in securities of issuers from more
developed countries and such investments are generally considered speculative
in nature. Brazilian investments, such as investments in our shares and ADSs,
are subject to economic and political risks, involving, among others:

     o  changes in the regulatory, tax, economic and political environment
        that may affect the ability of investors to receive payment, in whole
        or in part, in respect of their investments; and

     o  restrictions on foreign investment and on repatriation of capital
        invested.

     The Brazilian securities markets are substantially smaller, less liquid,
more concentrated and more volatile than major U.S. and European securities
markets, and are not as highly regulated or supervised as some of these other
markets. The relatively small market capitalization and illiquidity of the
Brazilian


                                      14


<PAGE>


equity markets may substantially limit your ability to sell the AmBev shares
underlying the AmBev ADSs at the price and time you desire. See "Item 9--The
Offer and Listing--Regulation of the Brazilian Securities Market".

     Developments in other emerging market countries may affect the market
price of AmBev's shares and ADSs

     Securities of Brazilian companies have been influenced by economic and
market conditions in other emerging market countries to varying degrees.
Although economic conditions are different in each country, investors'
reactions to developments in one country may affect the securities of issuers
in other countries, including Brazil. Between the fourth quarter of 1997 and
the first quarter of 1999, the international financial markets experienced
significant volatility, and a large number of market indices, including those
in Brazil, declined significantly. For example, the Asian economic crisis and
the 1998 Russian debt moratorium and devaluation of the Russian currency
triggered securities market volatility in Latin America and in other emerging
market countries. More recently, the current economic uncertainty in Argentina
and Turkey has adversely affected the value and liquidity of Brazilian
securities and the value of the Brazilian currency. The market value of
AmBev's shares and ADSs may therefore be adversely affected by events
occurring outside of Brazil, especially in other emerging market countries.

     AmBev's controlling shareholders are able to determine the outcome of
many corporate actions without the approval of non-controlling shareholders

     The controlling shareholders of AmBev, ECAP, Braco and the Zerrenner
Foundation together hold approximately 68.76% of AmBev's common shares. Such
controlling shareholders, together with Marcel Telles, a Co-Chairman of the
board of directors of AmBev, hold, in aggregate, approximately 74.32% of the
voting common shares of AmBev. In addition, Marcel Telles, Jorge Paulo Lemann
and Carlos Alberto Sicupira, who are directors of AmBev, collectively own
approximately 84.5% of the voting capital of Braco, which , in turn, owns
approximately 99.7% of the voting shares of ECAP. Braco and ECAP together hold
approximately 46.09% of the voting common shares of AmBev. Thus, these three
directors of AmBev have significant influence over AmBev, although several
types of matters must be decided in accordance with the AmBev shareholders'
agreement. See "Item 7--Major Shareholders and Related Party
Transactions--Major Shareholders--AmBev Shareholders' Agreement", for a
description of these matters.

     The controlling shareholders and Marcel Telles are able to elect the
majority of the members of the board of directors of AmBev and generally
determine the outcome of other actions requiring the approval of AmBev's
shareholders. Under Brazilian law, the protections afforded to non-controlling
security holders and the fiduciary duties of directors may, in some respects,
be less comprehensive than in the United States or other jurisdictions.

     AmBev shareholders may not receive any dividends

     According to its by-laws, AmBev must generally pay its shareholders 27.5%
of its annual net income, as determined and adjusted under accounting
principles set forth under Brazilian corporation law (adjusted income). The
main source for these dividends are the dividends that AmBev receives from its
operating subsidiaries, principally CBB. Adjusted income may be capitalized,
used to absorb losses or otherwise appropriated as allowed under Brazilian
corporation law; therefore, adjusted income may no longer be available to be
paid as dividends. AmBev might not pay dividends to its shareholders in any
particular fiscal year, upon the determination of the board of directors that
such distributions would be inadvisable in view of AmBev's financial
condition. While the law does not establish the circumstances rendering the
payment of dividends inadvisable, it is generally agreed that a company need
not pay dividends if such payment threatens the existence of the company as a
going concern or harms its normal course of operations.


                                      15


<PAGE>


     It is therefore possible that shareholders of AmBev will not receive
dividends in any particular fiscal year. Any dividends not distributed would
be allocated to a special reserve account for future payment to shareholders,
unless it is used to offset subsequent losses.

     Controls and restrictions on foreign currency remittance could harm the
ability of AmBev to make dividend payments

     Brazilian law provides that whenever there is a serious imbalance in
Brazil's balance of payments or reasons to foresee a serious imbalance, the
Brazilian government may impose temporary restrictions on the remittance to
foreign investors of the proceeds of their investments in Brazil. For example,
for approximately six months in 1989 and early 1990 the Brazilian government
froze all dividend and capital repatriations that were owed to foreign equity
investors and held by the Central Bank in order to conserve Brazil's foreign
currency reserves. These amounts were subsequently released in accordance with
Brazilian government directives. Similar measures could be taken by the
Brazilian government in the future.

     As a result, the Brazilian government may in the future restrict
companies such as AmBev from paying amounts denominated in foreign currencies
(such as dividends) or require that any such payments be made in Brazilian
reais. The likelihood that the Brazilian government would impose such
restrictions may be affected by the extent of Brazil's foreign currency
reserves, the availability of foreign currency in the foreign exchange markets
on the date a payment is due, the size of Brazil's debt service burden
relative to the economy as a whole, Brazil's policy toward the International
Monetary Fund and other factors. We cannot assure you that the Central Bank
will not modify its policies or that the Brazilian government will not
institute restrictions or delays on payments of external dividends. For more
information regarding exchange controls see "--Exchange Controls".

     If you exchange the AmBev ADSs for AmBev shares, you risk losing some
foreign currency remittance and Brazilian tax advantages

     The AmBev ADSs benefit from the certificate of foreign capital
registration of The Bank of New York (as depositary) in Brazil, which permits
The Bank of New York to convert dividends and other distributions with respect
to the AmBev shares into foreign currency and remit the proceeds abroad. If
you exchange your AmBev ADSs for AmBev shares, you will be entitled to rely on
The Bank of New York's certificate of foreign capital registration for only
five business days from the date of exchange. After this five-day period, you
will not be able to remit abroad non-Brazilian currency unless you obtain your
own certificate of foreign capital registration or you qualify under Brazilian
foreign investment regulations that entitle some investors to buy and sell
shares on Brazilian stock exchanges without obtaining separate certificates of
registration. If you do not qualify under the foreign investment regulations
you will generally be subject to less favorable tax treatment of dividends and
distributions on, and the proceeds from any sale of, the AmBev shares. For a
more complete description of Brazilian restrictions on foreign investments and
the foreign investment regulations, see "Item 10--Additional
Information--Memorandum and Articles of Association--Restrictions on Foreign
Investment" and "--Exchange Controls". For a more complete description of
Brazilian tax regulations, see "Item 10--Additional
Information--Taxation--Brazilian Tax Considerations".


                                      16


<PAGE>



     The AmBev ADSs have fewer and less well defined shareholders' rights as
compared to shareholders' rights of similar U.S. companies

     AmBev's corporate affairs are governed by AmBev's by-laws and Brazilian
corporation law, which may differ from the legal principles that would apply
to AmBev if the company were incorporated in a jurisdiction in the United
States, such as Delaware or New York, or in other jurisdictions outside of
Brazil. In addition, your rights or the rights of holders of the AmBev shares
under Brazilian corporation law to protect your interests relative to actions
taken by AmBev's board of directors or controlling shareholders may be fewer
and less well-defined than under the laws of those other jurisdictions outside
of Brazil.

     Although Brazilian law imposes restrictions on insider trading and price
manipulation, the Brazilian securities markets are not as highly regulated and
supervised as the U.S. securities markets or markets in other jurisdictions.
In addition, rules and policies against self-dealing and regarding the
preservation of shareholder interests may be less well defined and enforced in
Brazil than in the United States, potentially disadvantaging holders of the
AmBev shares and ADSs. Corporate disclosures may be less complete or
informative than what may be expected of a U.S. public company.

     Some entitlements are not available to U.S. holders of AmBev shares and
ADSs

     Due to various Brazilian and United States laws and regulations, United
States holders of AmBev shares or ADSs may not be entitled to all of the
rights possessed by Brazilian holders of AmBev shares. For instance, U.S.
holders of AmBev shares may not be able to exercise any preemptive or
preferential rights relating to their shares unless a registration statement
under the Securities Act is effective with respect to such rights or an
exemption from the registration requirements thereunder is available.


                                      17


<PAGE>


Item 4.  Information on the Company

                     BRAZILIAN BEVERAGE INDUSTRY OVERVIEW

     Brazil accounts for nearly half of the population and geographical area
of South America, with a population of approximately 170 million in 2000 and
approximately 3.3 million square miles of territory (almost the size of the
United States). According to the Instituto Brasileiro de Geografia e
Estatistica (IBGE), the Brazilian government-run institute of geography and
economy, the Brazilian economy had the tenth largest gross domestic product in
the world in 2000. The Brazilian beer market is the fourth largest in the
world and the largest in Latin America, with 82.6 million hectoliters of beer
consumed in 2000, according to Sindicerv. The Brazilian soft drink market,
with 110.0 million hectoliters sold in 2000, is the third largest in the world
(PepsiCo). According to the Instituto Brasileiro de Opiniao Publica e
Estatistica (IBOPE), the Brazilian market has a large and youthful consumer
base, with 42% of the population under the age of 20.

Economic Environment

     The economic environment in Brazil has and will continue to have a
significant effect on the profitability of Brazilian beverage producers. The
Brazilian economy experienced rapid growth immediately following the
introduction of the Real Plan in July 1994, particularly in the consumer
sector. The Real Plan succeeded in lowering inflation and stimulating growth.
GDP grew in constant terms by 5.9% in 1994 and 4.2% in 1995. The effect was a
marked increase in purchasing power during this period, leading to rapid
growth in 1994 and 1995 in the beverage industry of 24% and 27%, respectively.
Economic growth in Brazil began to slow in 1996. GDP grew by only 2.8% in 1996
and 3.0% in 1997. By late 1998, the Brazilian economy entered into a downturn,
which was exacerbated by a significant currency devaluation in January 1999.
GDP grew at a rate of only 0.2% and 0.8% in 1998 and 1999, respectively. The
economic slowdown and the following recession resulted in generally flat
demand in the Brazilian beverage industry from 1996 through 1999. The recovery
of the economy, beginning in late 1999, resulted in renewed consumer
confidence. In 2000, GDP grew by 4.5% , while the Brazilian beverage industry
grew by approximately 3%. We expect slower growth in the Brazilian economy in
2001 based, at least in part, on recent announcements by the Brazilian
authorities that they may be forced to ration power supplies due to reduced
hydroelectric generation caused by recent droughts and increasing interest
rates in an effort to support the real. For more information regarding these
electric shortages and their effects on us, see "--Risk Factors --Factors
relating to Brazil --Electric power shortages currently faced by Brazil could
adversely affect us", "--AmBev Business Overview--Distribution and
Sales--Advertising and Promotional Activities" and "--AmBev Business
Overview--Property, Plant and Equipment".


                                      18


<PAGE>


The Brazilian Beer Market

     Largest Market in Latin America

     Brazil is the largest beer market in Latin America. The following table
shows the ranking of beer consumption per country in selected markets in 1999:

Country                                       Annual Consumption
-------                                      -------------------
                                            (millions of hectoliters)
United States...............................         230
China.......................................         204
Germany.....................................         105
Brazil......................................          82
Japan.......................................          72
United Kingdom..............................          59
Mexico......................................          49
Russia......................................          40

---------------
Source: Impact

     Beer Consumption

     Beer is the second most popular drink category in Brazil after soft
drinks (Sindicerv). Per capita beer consumption in Brazil is relatively low
compared to many other large markets and has been relatively stable since
1995. According to Sindicerv, per capita consumption of beer in Brazil was
approximately 49.3 liters per annum in 2000. The following table sets forth
the world ranking in terms of per capita beer consumption by country in 1999:

Country                                             Liters
-------                                             ------
Germany...............................................127
United Kingdom........................................100
United States......................................... 83
Spain................................................. 68
South Africa.......................................... 62
Japan................................................. 57
Mexico................................................ 50
Brazil................................................ 49

---------------
Source: Impact

     Strong Regional Differences

     The Brazilian beer market is characterized by diverse regional
consumption patterns. For instance, in midwestern Brazil, our Skol and
Antarctica brands command nearly 51% and 13% of the market, respectively,
while this pattern is reversed in the northeast region, with Skol at 13.5% and
Antarctica at nearly 32% (Nielsen).

     Prevalence of Returnable Packaging

     The Brazilian beer market is characterized by a high proportion of
on-premise consumption (restaurants and bars) relative to off-premise
consumption (at home). According to Nielsen, approximately 73% of beer sales
in 2000 were sold on-premise in bars, restaurants and small retail
establishments, and the remaining 27% of sales were made in supermarkets.
Because on-premise beer sales are typically delivered in returnable bottles
(which, according to Nielsen, represented approximately 70% of beer packaging
in 2000), the capital expenditures and the commitments necessary to develop an
efficient bottling operation remain a significant barrier to entry in the
Brazilian beverage


                                      19


<PAGE>


industry. However, as is the case in more developed beverage markets,
non-returnable packaging in the Brazilian market has grown significantly in
recent years and may continue to rise.

     Pricing

     Wholesale and retail prices of beer have not been regulated in Brazil
since July 1990, when formal governmental price controls were lifted. Beer
sales volumes are heavily influenced by pricing. Key factors used in
determining retail prices for beer include brand preference, national and/or
local price promotions offered by manufacturers, whether consumption takes
place on or off-premise, the type of product, whether the container is
returnable or nonreturnable, the desired profit margins and the geographical
location of the retailer.

     The following table shows our estimate of the breakdown of the average
retail price of beer paid by Brazilian consumers for our products in 2000:

Manufacturers...................................................... 26%
Distributors....................................................... 11%
Retailers.......................................................... 34%
Taxes.............................................................. 29%
                                                                   ----
   Total...........................................................100%
                                                                   ====
----------------

     Taxation

     Brazilian beverage producers operate in a relatively unfavorable tax
environment, which results in higher beverage prices to consumers. In 1998,
the average excise and value-added taxes (IPI and ICMS) applicable to sales of
beer paid by beer producers, distributors and retailers in Brazil equaled
approximately 129% of net sales, according to Sindicerv. This compares
unfavorably to sales taxes applicable to producers, distributors and retailers
of 53% of net sales in Venezuela, 55% of net sales in the United States and
76% of net sales in Argentina in 1998, based on information published by
Sindicerv.

     Brazilian taxes on beer products include:

     o  a federally imposed excise tax on industrialized products (IPI), which
        is a fixed amount based on units sold, and varies depending on size
        and packaging and which can be adjusted for increases and decreases in
        the consumer price;

     o  a state value-added tax (ICMS), which is a fixed amount based on units
        sold, and varies depending on size and packaging and which can be
        adjusted for increases and decreases in the consumer price. The ICMS
        has two components, the direct and the substitute, related to the
        distributor and retailer;

     o  federal social security tax (COFINS) at a rate of 3% of a company's
        net sales plus direct ICMS; and

     o  a federal unemployment insurance contribution (PIS) at a rate of 0.65%
        of a company's total gross sales, subject to limitations.

     Seasonality

     Sales of beer in Brazil and AmBev's other principal markets are highly
seasonal, with substantially greater sales in the early summer.


                                      20


<PAGE>


The Brazilian Soft Drink Market

     Third Largest Market in the World

     Brazil's soft drink market is currently the second largest in Latin
America and the third largest in the world in terms of sales volume, with
approximately 110 million hectoliters sold in 2000, according to PepsiCo. The
following table shows estimated soft drink consumption in selected countries
in 2000:

Country                      Annual Consumption      Annual Consumption
-------                     --------------------    -------------------
                         (millions of hectoliters) (millions of 8 oz. cases)
United States............         576                      10,146
Mexico...................         153                       2,696
Brazil...................         110                       1,941
China....................          71                       1,256
Germany..................          69                       1,223
Great Britain............          48                         844

----------------
Source: PepsiCo

     Soft Drink Consumption

     Brazilian soft drink consumption has grown at an annual compounded rate
of 13.3% per year from 1993 to 1999, according to Nielsen, substantially
faster than the average annual gross domestic product growth of 3% over the
same period. Although per capita consumption has been growing rapidly since
the introduction of the real in 1994, rising from 26.6 liters in 1993 to 66
liters in 2000, according to PepsiCo Brazil continues to have a relatively low
per capita soft drink consumption rate as compared to other countries. The
following table sets forth the estimated per capita consumption rate in
selected countries in 2000:

Country                                                  Liters
-------                                                  ------
United States............................................  209
Mexico...................................................  152
Great Britain............................................   93
Germany..................................................   85
Brazil...................................................   66
China....................................................    6

-------------
Source: PepsiCo

     The Brazilian soft drink market consists mainly of carbonated colas,
guaranas and other flavors, principally conventional fruit-flavored sodas and
tonic water. Guarana is a tropical berry-like fruit that grows in the Amazon
rainforest. In Brazil, guarana extract is derived from guarana seeds and is
used to make several beverages, including the guarana soft drinks.

     The following table sets forth the percentage of total carbonated soft
drink sales volume by flavor in Brazil during the periods indicated:

                                        Year Ended December 31,
                       -----------------------------------------------------
Type                      2000     1999     1998     1997     1996     1995
----                      ----     ----     ----     ----     ----     ----
Colas..................   42.8%    38.4%    39.5%    41.8%    44.3%    45.1%
Guaranas...............   28.1%    26.6%    26.0%    25.3%    24.0%    23.5%
Other..................   29.1%    35.0%    34.6%    32.9%    31.7%    31.4%

----------------
Source: Nielsen

     According to Nielsen, in 2000 approximately 53.1% of Brazilian soft drink
sales were consumed on- premise (bars and restaurants), while 46.9% of
consumption was off-premise, through supermarket sales,


                                      21


<PAGE>


with approximately 82.9% of Brazilian soft drink sales in non-returnable
plastic bottles and cans and the remainder in returnable bottles.

     Pricing

     There are no government-imposed price controls on the wholesale or retail
prices of soft drinks in Brazil. Prior to July 1990, however, prices for soft
drinks were subject to formal governmental price controls. As in the case of
beer, soft drink sales volume is heavily influenced by pricing. This is
illustrated by the sharp rise in market share of the some 600 "B-brand"
producers, whose products (known as tubainas) are priced at deep discounts to
the premium brands. The B-brand producers have been able to discount their
brands in part due to low distribution costs resulting from use of non-
returnable PET packaging. In 1993, only 12% of soft drink sales were in
non-returnable packaging versus 80% in 2000. In addition, as has been widely
publicized in the Brazilian press, the B-brand producers have been able to
sell their products at lower prices as a result of their failure to fully pay
their taxes. The B-brands had a 13% market share in 1993 which has grown
rapidly to a 32.9% market share in 2000 (Nielsen).

     Taxation

     As in the case of beer, sales of soft drinks in Brazil are subject to a
high level of taxation, which results in substantially higher prices to
consumers. Additionally, cola flavors are subject to 50% higher taxation than
other flavored soft drinks. The following table shows our estimate of the
breakdown of the average retail price of soft drinks paid by Brazilian
consumers for our products in 2000:

Manufacturers................................  30%
Distributors.................................  11%
Retailers....................................  38%
Taxes........................................  21%
                                             -----
     Total................................... 100%
                                              ====

--------------------


     In Brazil, soft drinks are subject to the same types of taxes that apply
to beer. See "--The Brazilian Beer Market--Taxation".

     Seasonality

     As with beer, soft drink sales in Brazil and in AmBev's other principal
markets are seasonal, although seasonal variations in soft drink sales tend
not to be as strong as seasonal variation in beer sales.

                            AMBEV BUSINESS OVERVIEW

Overview

     We are the largest beverage company in Latin America in terms of gross
sales. We produce, distribute and sell beer, soft drinks and other beverage
products primarily in Brazil, as well as in Argentina, Venezuela and Uruguay.
According to Impact, we are the largest beer producer in Latin America and the
fourth largest beer producer worldwide. We are also the second largest soft
drink producer and the sole distributor of Pepsi soft drink products in
Brazil. The balance of our business is comprised primarily of sales of other
beverage products, including water, isotonic sport drinks, fruit juice and
iced tea.

     For the year ended December 31, 2000, we accounted for 69.1% of the
Brazilian beer market (Nielsen), excluding the Bavaria brand, which we have
divested. With over 64.8 million hectoliters of


                                      22


<PAGE>


beer sold in the year ended December 31, 2000, we accounted for approximately
46% of all beer sold in Latin America (Sindicerv) and have a total annual beer
production capacity of 94.4 million hectoliters. Our Skol, Brahma and
Antarctica brands are among the 15 most-consumed beer brands in the world
(Impact). In the year ended December 31, 2000, net sales from our beer
operations were US$2.21 billion, accounting for 82.5% of our consolidated net
sales. The following table sets forth recent Brazilian and global rankings
based on sales volumes of our leading brands:

                                                            1999
                                          1999             Global
               Brand                Hectoliters Sold       Ranking
------------------------------------------------------------------------
Skol                                23.5 million hl          4th
Brahma Chopp                        19.5 million hl          7th
Antarctica                          11.6 million hl         14th

---------------------
Source:  Impact (1999 data)

     For the year ended December 31, 2000, we had an approximate 17.4% market
share of the Brazilian soft drink market (Nielsen). Our principal proprietary
soft drink brands include Guarana Antarctica, Sukita, Soda Limonada Antarctica
and Guarana Brahma, which together accounted for 68.4% of our soft drink
volume sales. Through our strategic alliance with PepsiCo we are its sole
bottler in Brazil and produce and distribute Pepsi soft drink products, which
accounted for 31.6% of our soft drink sales volumes. For the year ended
December 31, 2000, revenues from our soft drink operations were US$410
million, accounting for 15.3% of our consolidated revenues.

     The remainder of our consolidated revenues is composed primarily of the
sale of non-alcoholic and non-carbonated beverage sales and malt sales to
third parties. Revenues from these products in 2000 totaled US$59 million, or
2.2% of our consolidated revenues.

     We have an extensive and integrated distribution network for the sale and
distribution of our products, including a network of nearly 700 third-party
distributors which accounted for 76.6% of our sales volumes in 2000 as well as
a broad-based direct distribution system which accounted for 23.4% of our
sales volumes for the same period. These distribution systems in the aggregate
service over one million points of sale in Brazil.

Our Products and Brands

     We produce beer, soft drinks and other beverage products, including
isotonic sport drinks, iced tea, water and fruit juices. In 2000,
approximately 82.5% of our total net sales consisted of beer sales and
approximately 15.3% consisted of soft drink sales.

     The following table sets forth our aggregate pro forma sales volumes of
beer and soft drinks for 1998 through 2000:

                                                Year Ended December 31,
                                               ------------------------
                                        2000(1)        1999(1)         1998(1)
                                        ----           ----            ----
                                              (thousands of hectoliters)
Beer................................... 64,823         60,624          62,523
Soft Drinks............................ 17,177         15,962          20,749

----------------------
(1)  Sales volumes reflect the combined volume sales of Brahma and Antarctica.


                                      23


<PAGE>


     AmBev's beer is sold in all 26 states and the Federal District of Brazil.
AmBev's operations are divided into six geographic regions within Brazil.
AmBev had a leading share of the beer market in all of these six regions in
2000 (Nielsen).

     Revenues by Product Type and Geographic Region

     In 2000, we had net beer sales of US$2.2 billion compared to US$1.5
billion in 1999 and US$2.2 billion in 1998. In 2000, we had net soft drink
sales of US$410.3 million compared to US$212.6 million in 1999 and US$454.9
million in 1998. In 2000, we had net domestic sales of US$2.5 billion compared
to US$1.6 billion in 1999 and US$2.5 billion in 1998. In 2000, we had net
international sales of US$214.3 million compared to US$208.0 million in 1999
and US$197.8 million in 1998.

     Beer

     Beer is our core business and the largest contributor to our revenues. In
2000, beer sales accounted for 82.5% of our net sales, totaling US$2.2 billion
on sales volumes of 64.8 million hectoliters (of which 3.5%, US$79.5 million
and 2.7 million hectoliters were attributable to Bavaria). We currently
operate 12 beer and 13 mixed beer/soft drink plants in Brazil with an
aggregate annual installed beer production capacity of approximately 94.4
million hectoliters. Our plants are located in all six regions in Brazil, and
we also operate plants in each of Argentina, Venezuela and Uruguay.

     Our beer brands are divided into three beer brand portfolios: Skol,
Brahma and Antarctica. Each of these portfolios offers a variety of beers,
including pilsner, lager, dark and nonalcoholic beers. Skol Pilsen, Brahma
Chopp and Antarctica Pilsen, which are all standard pilsner beers, are our
core products and the flagship products of their respective brand portfolios,
representing 46%, 26% and 16%, respectively, of our total beer product mix by
volume in 2000. The remainder of our beer sales are attributable to niche
brands, most of which are also proprietary brands. Two brands, Miller and
Carlsberg, are produced under license from third parties, and together
represented 0.34% of our 2000 sales by volume. According to Impact, in 1999
the Skol, Brahma Chopp and Antarctica Pilsen brands were the fourth, seventh
and fourteenth most consumed brands of beer in the world, respectively. Our
beer products are distributed through our Skol, Brahma and Antarctica
third-party distribution networks, as well as through our own direct
distribution network.

     The following table sets forth the market shares of AmBev's principal
beer brand portfolios by volume in Brazil in 2000:

Brand

Skol Pilsen.................................................30.2%
Brahma Chopp................................................22.6%
Antarctica Pilsen...........................................16.3%

------------------
Source: Nielsen

     Our Skol portfolio includes Skol Pilsen, Skol Ice and Carlsberg, which
are pilsner beers, and Skol Bock and Caracu, which are dark beers.

     Our Brahma portfolio includes Brahma Chopp and Miller Genuine Draft,
which are pilsner beers, Brahma Bock and Malzbier, which are dark beers,
Brahma Extra a strong-flavored pilsner beer, and Brahma Light, a light beer.

     Our Antarctica portfolio includes Antarctica Pilsen, Bohemia, Antarctica
Pilsen Extra, Polar Pilsen, Polar Export, Serramalte, Original, Antarctica
Pilsen Extra Cristal and Antarctica Pilsener Chopp, which are pilsner beers,
Antarctica Malzbier, which is a dark beer, Polar Export, which is a lager
beer, and Kronenbier, which is an alcohol-free beer. The Bavaria Pilsen brand,
which was launched in 1997


                                      24


<PAGE>


and which we have sold pursuant to our performance agreement with CADE, was
responsible for approximately 3.0% of our net sales in 2000.

     Outside of Brazil, AmBev has beer operations in Argentina, Venezuela and
Uruguay through its controlling interests in CCBA S.A., located in Argentina,
CA Cervecera Nacional (CACN), located in Venezuela, and Cerveceria y Malteria
Paysandu S.A. (Cympay) and Compania Salus, both located in Uruguay. In
addition, AmBev exports a small portion of its beer products. Our principal
export beers are Brahma Chopp and Antarctica. Total exports of beer
represented less than 1% of AmBev's total net sales in 2000. Our total beer
sales outside of Brazil for each of the last three years accounted for less
than 5% of our total revenues in those years.

     AmBev began operations in Argentina and Venezuela in 1994. Principal
brands sold in these countries are Brahma Chopp, Brahma Bock, Brahma Malta,
Malta Caracas, Cerveza Nacional and Stout.

     In July 2000, a joint venture formed by AmBev and Groupe Danone purchased
a majority interest in Compania Salus (Salus), an Uruguayan beer and mineral
water producer that produces Patricia Negra, Patricia Gran Chopp, Malta Salus,
Pomelo Salus, Naranja Salus and Sidra Salus for sale in Uruguay.

     In February 2001, AmBev purchased 95.4% of Cerveceria y Malteria Paysandu
S.A.-Cympay (Cympay), a Uruguay-based malt, beer and water concern, for
US$27.7 million. Cympay controls a malting facility with an annual production
capacity of 81,000 metric tons, as well as the Nortena and Prinz beer brands.
Cympay also controls a 78.4% stake of Fuente Matutina S.A., a Uruguayan
company that produces mineral water. In addition to increasing our
international presence, the purchase of Cympay also increases AmBev's vertical
integration in malt, one of our most important raw materials in the production
of beer. AmBev also operates Malteria Uruguay through its wholly owned
Argentine subsidiary, Malteria Pampa S.A.

     Soft Drinks

     Sales of soft drinks represented approximately 15.3% of AmBev's net sales
in 2000, totaling US$410.3 million on sales volumes of 17.2 million
hectoliters. We export a small amount of our soft drinks. These exports
represented less than 1% of our revenues in each of the last three fiscal
years.

     AmBev focuses on a core soft drink portfolio that offers the following
brands: Guarana Antarctica, Pepsi and Sukita orange soda. Our soft drinks are
sold and distributed through our beer distribution network, which serves
on-premise points of sale, as well as in all of Brazil's leading supermarkets.
Guarana Antarctica is also sold in major fast-food outlets such as McDonald's
and Pizza Hut.

     The following table sets forth the market shares of AmBev's principal
leading soft drink brand portfolios by volume in Brazil in 2000:

Brand

Antarctica..........................................................9.5%
Pepsi ..............................................................4.3%
Brahma .............................................................3.6%

----------------
Source: Nielsen

     Other Beverage Products

     We produce mineral water, isotonic sport drinks, iced tea and packaged
and post-mix fruit juices which we sell and distribute through our beer
distribution networks. Net sales of these products (including sales of malt)
amounted to US$58.8 million in 2000, or approximately 2.2% of our net sales.


                                      25


<PAGE>


     The Fratelli Vita brand of mineral water and the Marathon brand of
isotonic sport drinks. According to Nielsen, the Brazilian water market was
5.2 million hectoliters in 2000 and we had a 1.7% share of that market by
volume.

     The isotonic beverage market is relatively new to Brazil, and the total
market was 290,000 hectoliters in 2000, according to Nielsen. Our Marathon
brand is the second most popular brand in this market, with a 15% market share
by volume in 2000 according to Nielsen . Our biggest competitor is Gatorade,
the market leader in this segment, with a market share during that same period
of 72.3% (Nielsen).

     The Brazilian iced tea market was approximately 370,000 hectoliters in
2000, according to Nielsen. AmBev participates in the Brazilian iced tea
market through a joint venture with Industrias Gessy Lever Ltda. under which
AmBev has the exclusive right to sell Lipton brand iced tea in Brazil. This
brand is the market leader in the iced tea segment, with an estimated market
share of 41% in 2000, according to Nielsen. Our principal competitors in this
market include Leao, with market share in 2000 of 39.8, according to Nielsen.

     New Developments

     On November 30, 2000, AmBev and Souza Cruz S.A. (a subsidiary of British
American Tobacco p.l.c.) announced the formation of a joint venture to manage
the purchase of indirect materials that are non-strategic to the production
process, and of services through a "B2B - Business to Business" portal over
the Internet. The purpose of this initiative is to create benefits for the
supply chain, choosing the best practices, optimizing processes, rationalizing
costs and promoting the access of all and any suppliers to the purchasing
companies, obtaining better competitive conditions and guaranteeing the
transparency of the transactions. On December 26, 2000, AmBev invested R$25
thousand to incorporate Agrega Inteligencia em Compras Ltda. (Agrega), of
which it owns 50%. The documents relating to the creation of Agrega were
presented to CADE for evaluation and the Company awaits its decision.

         The Brazilian government has announced that it may be forced to
introduce measures for electric power rationing in the upcoming months due to
reduced hydroelectric generation caused by recent droughts. Although AmBev is
not an energy intensive company, its energy need at peak consumption is around
120 megawatts per hour (MWh). Energy costs represent approximately 2% of
AmBev's costs of goods sold. AmBev currently has capacity to generate 12 MWh
at its plant in Rio de Janeiro, and plans to expand such capacity by 5 MWh by
the end of 2001. AmBev plans to add co-generation in 9 plants by the end of
2002, increasing its co-generation capacity to 80 MWh in the next 12 to 18
months. AmBev recently purchased 10 mobile generators to reinforce its energy
supply system, which may be allocated accordingly to the priorities of the
plants or distribution centers. In total, AmBev has 28 fixed generators, which
currently, with the use of its mobile generators, produces 45% of its energy
needs. AmBev also plans to rent or purchase additional generators for those
plants located in the most affected regions. AmBev has already began to
implement energy saving measures, such as air conditioning rationing and
engines changes, among others.

         AmBev's sales force is also working closely with retailers and
distributors to educate them on energy consumption and proper use of our
coolers during any period of rationing. We believe that energy consumption of
AmBev's coolers represents a small portion of energy consumption in the points
of sales.

     Joint Ventures and Strategic Alliances

      In 1997 AmBev acquired Pepsi-Cola Engarrafadora Ltda. and PCE Bebidas
Ltda., PepsiCo bottlers in southern and southeastern Brazil and at the same
time acquired the exclusive rights to produce, sell and distribute Pepsi soft
drink products in northeastern Brazil. In 1999, AmBev obtained the exclusive
rights to produce, sell and distribute Pepsi soft drink products throughout
Brazil. On October 9, 2000, following the combination, AmBev entered into a
new franchise agreement with PepsiCo which


                                      26


<PAGE>


terminated the Brahma franchise agreement and granted AmBev sole bottler and
distributor rights for Pepsi soft drink products in Brazil. Our PepsiCo
franchise agreement expires in 2017, and thereafter, will be automatically
renewed for additional ten-year terms absent two years' prior notice by either
party of its intent not to renew the contract following the expiration of the
initial or any subsequent term.

     In October 1999, AmBev entered into a memorandum of understanding with
PepsiCo pursuant to which PepsiCo agreed to license or sell our leading soft
drink product, Guarana Antarctica, for bottling, sale and distribution by
PepsiCo outside of Brazil. Since April 2000, when CADE approved the
controlling shareholders' contribution, AmBev has been working towards
implementing the licensing or sale of Guarana Antarctica with PepsiCo and
negotiating the specific terms and conditions of the licensing or sale of
guarana concentrate or guarana soft drinks.

     In September 1995, we entered into a 50% - 50% joint venture agreement
with Miller Brewing Company to produce and market Miller Genuine Draft in
Brazil and, in the future, in other South American markets. Under the joint
venture agreement, Miller Brewing do Brasil Ltda. was created to import and
distribute Miller's products in Brazil through our distribution network. The
joint venture agreement has a term of 15 years and expires on December 31,
2010. The joint venture may be terminated by either party in the event
performance targets are not met by the joint venture, or in case of
noncompliance by either party with their obligations for more than 30 days
after notice.

     The production of Miller Genuine Draft in Brazil began in September 1996
in our Jacarei facility. The product is now distributed throughout Brazil, in
both long-neck bottles and aluminum cans, as a super premium brand. Through
our distribution network, Miller Brewing do Brasil sold 164 thousand
hectoliters of Miller beer in 2000. Miller's market share of the premium
market was approximately 8% in 2000 (by sales volume), according to Nielsen.
We estimate that the super premium beer market in Brazil currently accounts
for approximately 3% of the total Brazilian beer market (by sales volume).
AmBev and Miller are currently negotiating a licensing agreement under which
AmBev will produce and distribute Miller Genuine Draft in Brazil on terms and
conditions similar to those of the licensing agreement between AmBev and
Carlsberg with respect to the Skol brand described below.

     In December 1996, our Skol subsidiary entered into a licensing agreement
with Carlsberg A/S. Under this agreement, Skol acquired the license to begin
the production of Carlsberg beer in Brazil for sale and distribution
throughout Brazil as well as the rest of South America, as a super premium
brand. In addition, pursuant to the agreement, Skol acquired the right to use
the Carlsberg brand name in South American countries other than Brazil. The
licensing agreement is part of a general cooperation agreement between Skol
and Carlsberg, which allows for the parties to enter into various licensing
agreements. The current licensing agreement has a term of 20 years, expiring
on October 1, 2016, renewable for 10 additional years. If renewed, the
agreement may be terminated by either party upon prior 12-month notice after
January 1, 2018. Carlsberg may also terminate the agreement in the event of
transfer of control of our Skol subsidiary.

     Production of Carlsberg beer began in the second quarter of 1997. In
2000, we distributed 44,000 hectoliters of Carlsberg beer. According to
Nielsen, Carlsberg beer had an approximately 2% share of the super premium
beer market in 2000 (by sales volume).

     In August 1997, Fratelli Vita Bebidas Ltda., a subsidiary of Brahma,
entered into a joint venture with Industrias Gessy Lever Ltda., a subsidiary
of Unilever NV, creating Ice Tea do Brasil Ltda. The two companies have an
equal interest of 50% of the total shares of Ice Tea do Brasil. The joint
venture agreement will be in force until December 31, 2002, and is renewable
for additional five-year periods. The agreement can be terminated by either
party in the event performance targets are not met by the joint venture, or in
the event of transfer of control of either party.


                                      27


<PAGE>


Distribution and Sales

     Distribution

     AmBev maintains an extensive third-party and direct distribution system,
which has enhanced the penetration of our brands throughout Brazil. Control of
a strong distribution network is currently an advantage in the Brazilian
marketplace due to the large number of small points of sale and because the
majority of beer products are sold in returnable bottles, which must be
transported both to and from the points of sale. In addition, the Brazilian
beer market is characterized by a high proportion of on-premise consumption
(restaurants and bars) relative to off-premise consumption (at home).
According to Nielsen, approximately 73% of the beer sold in 2000 was consumed
on-premise in bars, restaurants and small retail establishments, with the
remaining 27% of sales from supermarkets. Because on-premise beer sales are
typically delivered in returnable bottles (which, according to Nielsen,
represented approximately 70% of beer packaging in 2000), the capital
expenditures and the commitments necessary to develop an efficient bottling
operation constitutes a significant barrier to entry in the Brazilian beverage
industry. However, as is the case in more developed beverage markets,
non-returnable packaging in the Brazilian market has grown significantly in
recent years and may continue to rise.

     AmBev currently maintains three separate third-party distribution
networks. Combined, these distribution networks reach over one million
individual points of sale in Brazil. AmBev currently is in the process of
introducing multiple-brand distribution (in which one third-party distributor
distributes two or more of our brand portfolios) in select geographical areas,
while maintaining separate sales forces for each brand, which we believe is
necessary in order to maintain the proper incentive structures within our
sales forces. The consolidation of multi-brand distribution, both in direct
and third-party, is expected to give rise to significant cost savings.

     AmBev utilizes the "pre-sell" system as its principal method of sales in
Brazil. Under the pre-sell system, a separate sales staff obtains orders from
customers prior to the time of delivery by trucks. The pre-sell system enables
us to utilize our trucks more efficiently, since our route trucks can be
loaded with precisely the amount needed to fill our customers' orders, and it
also provides us with real-time information about the product and presentation
needs of our customers as our sales staff relays order information to our
headquarters using hand-held computers.

     A major initiative of AmBev has been to continuously improve its
distribution network in order to increase the volume of sales and deliveries
per distributor, thus achieving economies of scale. In connection with our
on-going goal of increasing the efficiency of our distribution networks, we
developed an "Excellence Program" to evaluate, educate and motivate our
distributor partners. The Excellence Program allows us to compare and contrast
all third-party and direct distribution operations and is a tool for
standardizing the specific operating procedures needed to run an efficient
distribution operation and to maintain brand integrity. This program was
implemented in 1992 in the Brahma and Skol distribution network and in 1999 in
the Antarctica network of distributors. As part of our Excellence Program, we
have significantly reduced the number of distributors since 1994 and focused
on increasing the volume and the quality of the service provided by these
distributors. We also intend to expand our direct distribution system from its
current approximately 23% of our distributed volumes to between 40% and 50%
over the next five years. As our direct distribution system expands, we expect
to incur additional selling, general and administrative expenses as a result
of, among other things, expansion of our sales force and increased
transportation costs. However, we expect that this additional cost will be
compensated for by additional revenue. The growth of our direct distribution
network will allow us to increase revenue per hectoliter as we start to
receive former distributors' margins. More importantly, it will also enable us
to control distribution directly in key strategic and high volume regions.


                                      28


<PAGE>


         Third-Party Distribution Network

     AmBev's third-party distribution network, currently the primary means of
distribution for AmBev's products in Brazil, distributed approximately 77% of
AmBev's volume in 2000. We have exclusive agreements with approximately 700
independent distributors who collectively cover all 26 states and the Federal
District. As we seek to improve efficiencies in our distribution network,
including economies of scale, we will seek to consolidate our third-party
distribution network.. See "--Direct Distribution System".

     Our distribution agreements require the distributor to carry exclusively
our Brahma, Skol and Antarctica beer products as well as AmBev's soft drink
core portfolio and grant the distributor exclusive rights to sell such
products within a defined area. The distributors may distribute other
products, provided that such products are not produced by AmBev's competitors,
unless AmBev expressly authorizes it. Generally, these agreements have an
initial term of between one and five years and are renewable for an additional
term after which the contract may become open-ended. All sales to distributors
are made "free on board" (FOB).

     The number of distributors within an area is determined by considering,
among other things, market needs, number of points of sale, geographic
features and the availability of communications systems. AmBev's sales volume
is not concentrated in any one distributor within any particular area.

     Our third-party distributors pay for our products either in cash at time
of delivery or through a credit arrangement. Credit terms are typically based
on the distance between the distributor and plant, with one extra day to make
payment for each 300 kilometers between the plant and the geographical region
covered by the distributor. AmBev's current average credit terms with its
distributors are approximately two days. Credit is granted at prevailing
market rates.

     AmBev has an administrative team dedicated to providing support to its
third party distributors and to improving the efficiency and reducing the
costs of its third party distributors. Under our Excellence Program we
continually seek to optimize practices for cost reduction, sales effectiveness
and customer service. AmBev has also developed several other innovative
programs aimed at improving its distribution network, such as educational
programs at our in-house training academy for our in-house and third-party
distribution personnel, and weekly sales force training through video
satellite feeds containing market updates and information on our current
strategic initiatives.

         Direct Distribution System

     In addition to our third-party distribution networks, AmBev operates a
direct distribution system which distributes AmBev products directly to points
of sale, including for both on-premise and off- premise consumption. AmBev's
direct distribution system includes 24 direct distribution centers that
together delivered approximately 23% of our beverage products by volume in
2000. We intend to expand our direct distribution system to larger urban areas
presently served by our third-party distribution network and expect direct
sales to account for up to between 40% and 50% of our sales by volume in the
next five years, reducing the number of third-party distributors.

     Sales

         Points of Sale

     AmBev's Brazilian sales operations are divided into six geographic
regions and our products are sold in over one million points of sale
throughout Brazil. We sell our beverage products throughout Brazil to:

o    retail establishments such as restaurants, bars and small- and
     medium-sized retail outlets, primarily for on-premise consumption; and

o    supermarket chains for off-premise consumption.


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<PAGE>


While over two-thirds of our beer sales are on-premise sales, approximately
half of our soft drink sales are on-premise.

         Terms of Sale

     Most of AmBev's sales are on a cash basis. Direct sales to selected
customers, such as major supermarkets, fast-food restaurants, convenience
stores, some of our third-party distributors and other major customers may be
made on a credit basis, with terms of up to 21 days. The terms and other
credit conditions will often depend on competitive factors and the strategic
importance of the buyer.

         Sales Force

     AmBev maintains a separate sales force for each of its three brand
portfolios, whose responsibilities are divided by geographic region. These
sales forces monitor the performance of AmBev's products in several different
ways, including evaluation of sales by brand, presentation (packaging) and
distribution channel.

     AmBev's own sales representatives, also organized along product lines,
are responsible for dealing with large direct sales clients such as
supermarkets and fast-food chains, and for sales efforts along AmBev's direct
distribution routes. Sales personnel are offered various incentive packages
designed to maximize volumes at given price levels and to prevent
"cannibalizing" sales from other AmBev brands.

     Pricing

     Since the Brazilian government deregulated beer prices in 1990, AmBev's
pricing has generally been based upon a reference price issued periodically by
its headquarters. The final selling price in each of its six market regions is
based on the reference price, and takes into account local taxes and
competitive pressures. Actual prices are reported daily through AmBev's
information network, so that the corporate staff is able to monitor discount
levels and detect market trends. When determining the reference price, AmBev
considers many factors, each of which varies in importance from time to time.
These factors include general economic conditions, regional taxes, the success
and profitability of AmBev's various product presentations, the prices of its
competitors, the effects of inflation and the level of its costs. AmBev works
continuously with its point-of-sale retailers to promote competitively optimal
pricing. There is currently no regulation of wholesale or retail beer or soft
drink prices in Brazil.

     Sales of AmBev's products are not dependent upon any single customer.
AmBev's largest customer accounted for less than 3% of AmBev's total net sales
in 2000.

     Advertising and Promotional Activity

     AmBev advertises and promotes its products through television and other
media advertising campaigns, including billboards, and through the sponsorship
of recreational events. In addition, AmBev engages in various point of sale
promotions, such as end-aisle displays and special contests, aimed at
enhancing consumer preference for its brands. In certain competitively key
outlets, AmBev provides its point of sale establishments with "branded"
furniture featuring AmBev's products' logos and distinctive color schemes,
and, where competitively appropriate, promotional banners and posters
advertising the pricing of its products at that establishment. These programs
allow AmBev to gain visual dominance of particular points of sale,
strengthening its brand and encouraging customers to purchase its products.

     On May 24, 2001, AmBev signed an agreement with the Brazilian Soccer
Association (CBF) for sponsorship of the Brazilian national soccer team. The
Guarana Antarctica brand logo will be displayed on the Brazilian national
soccer team training shirt. According to the sponsorship agreement, AmBev may
also run other promotions, use illustrated cans, points-of-sale merchandising
materials and advertising campaigns, which may be extended to all of AmBev's
beverage portfolio. AmBev has


                                      30


<PAGE>


chosen Guarana Antarctica as the soft drink brand to initiate its sponsorship
campaign. AmBev will pay the CBF a minimum of US$10 million annually for 18
years. The amount payable by AmBev may increase by up to double the minimum
amount based upon the performance of AmBev's proprietary soft drink market
share.

     A recent key marketing initiative has been the introduction into the
Brazilian market of our custom- made coolers for use in points of sale
focusing on on-premise consumption, especially designed and built to chill
beer at the optimal temperature for consumption in Brazil. Before these
coolers were introduced to the points of sale, most beer in Brazil was
presented to consumers in refrigerators designed to chill soft drinks. Our
special coolers, decorated to maximize the visual impact of our Brahma, Skol
and Antarctica brands, chill our beer products to sub-zero (centigrade)
temperatures and have been shown to significantly increase volume sales at
their locations. Our coolers, however, depend on a consistent supply of
electric power and Brazilian authorities have announced that they may be
forced to reduce power supplies in the upcoming months due to reduced
hydroelectric generation caused by recent droughts. To the extent these
reductions affect our production of beer and soft drinks, as well as, the
operation of our coolers and the ability of retailers generally to deliver our
products at the chilled temperatures our customers prefer, our sales could be
negative affected. To date we have installed 48,000 special coolers in key
strategic locations. AmBev plans to install another 100,000 over the next two
years at competitively significant points of sale.

     AmBev regularly conducts market surveys to monitor the image of our
products and the effectiveness of our marketing activities. Within the past
few years we initiated several marketing plans, which were designed to assist
in making selling strategy decisions for each environment in which we compete.
AmBev also uses a telephone service, the "Consumer Service Center", which
enables us to listen to consumers' comments about our products and which
receives approximately 20,000 calls per month from consumers. Communication
with consumers is a major priority for AmBev and has been improved by the
creation of websites for each of AmBev's principal beverage brands.

         Product Presentations

     The substantial majority of AmBev's beer sales are made in returnable 600
milliliter glass bottles. In order to maximize sales and per capita
consumption of its products, AmBev examines sales data on a regular basis in
an effort to develop a mix of product presentations to best satisfy its
customers. The following table sets forth the historical presentations for
AmBev's beer products:

                                                  Year Ended December 31,
                                                  -----------------------
                                                     2000(1)    1999(1)
                                                     ----       ----
Presentation

Returnable glass bottles..........................    70%        72%
Cans .............................................     25        23
Nonreturnable glass bottles.......................      4         4
Barrels (draft beer)..............................      2         1

--------------
(1)  Reflects combined Brahma and Antarctica data.

     Packaging in the Brazilian beer market has been characterized by the
predominance of returnable glass bottles. However, the cans segment grew after
1994 due to favorable foreign exchange rates, which made it cheaper to import
aluminum used for can production, as well as the decision by some supermarkets
to discontinue the sale of returnable bottles. The use of cans increased
significantly in 1997 and 1998 due to an increase in aluminum can production
capacity in the domestic market, which caused the price of cans to decline.
Aluminum can prices recently increased as a result of the devaluation of the
real in January 1999. Beverage sales in cans are generally less profitable for
AmBev because of the lower margins attributable to non-returnable packages.
Cans are particularly popular with


                                      31


<PAGE>


supermarket vendors, primarily because they prefer not to allocate the
additional space necessary to store returnable bottles.

     The soft drink industry in Brazil moved rapidly to the less-profitable
one-way plastic bottles and cans as opposed to returnable glass bottles during
the early 1990's. The following tables set forth the packaging presentation of
AmBev's soft drink products:

                                                 Year Ended December 31,
                                  --------------------------------------
                                     2000(1)    1999(1)   1998(1)     1997(1)
                                  ----------- ---------- ---------- ----------
Presentation
------------
One-Way Plastic Bottles...........    63%        62%       65%          66%
Cans..............................     23        19        15           11
Returnable Glass Bottles..........     13        18        20           22
Post Mix..........................      1         1         1            2

---------------
(1)  Reflects combined Brahma and Antarctica data.

Competition

     Beer

     Beer manufacturers compete for market share through brand preference,
distribution, product availability, pricing, product packaging, consumer
promotions and service provided to retail outlets, including merchandising
equipment, maintenance of bottle inventories and frequency of visits.

     Until July 1999, when Brahma and Antarctica came under the common control
of AmBev, the Brazilian beer market had three major producers: Brahma, which
was the market leader through its Brahma and Skol brands, followed by
Antarctica, owner of the Antarctica Pilsen and Bavaria Pilsen brands (the
latter of which we have since sold to Molson Inc. pursuant to our performance
agreement with CADE), and Cervejarias Kaiser Brasil Ltda., owner of the Kaiser
Pilsen brand. In 1999, these three companies accounted for approximately 87%
of beer sales in Brazil, according to Nielsen. Following the combination and
the subsequent sale of the Bavaria brand of AmBev to Molson Inc., the leading
participant in the Brazilian beer market is AmBev, followed by Kaiser,
Schincariol and Molson Inc. The beer business in Brazil is characterized by
strong competition among these major producers, with each engaged in intensive
advertising and promotional campaigns, the introduction of new brands and the
development of more convenient forms of packaging.


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<PAGE>


     The following table sets forth the estimated market shares rounded to the
nearest whole number, based on sales volume, of each major beer portfolio in
Brazil for each of the periods indicated:

                                      Year Ended December 31,

Portfolio             2000     1999      1998      1997     1996       1995
---------           -------- --------- --------- -------- --------- -------
Brahma..............  23%       22%       24%      27%       31%        31%
Skol................   30        27        24       22        19         15
Antarctica..........   16        18        19       24        26         31
Bavaria.............    4         6         7        1        --         --
Kaiser..............   14        15        16       17        16         15
Schincariol.........    9         8         7        7         5          6
Other...............    4         5         4        3         2          2

--------
Source: Nielsen

     AmBev's largest competitor is Cervejarias Kaiser Brasil Ltda., a joint
venture created in 1982 by Heineken N.V., the Coca-Cola Company and 18
Brazilian Coca-Cola bottlers. Kaiser's product portfolio includes Kaiser
Pilsen, Kaiser Bock, Kaiser Gold, Summer Draft and Heineken. Generally,
Kaiser's prices are lower than AmBev's in comparable market segments. With the
support of Heineken and Coca- Cola, Kaiser has been and will remain a
significant competitor in our markets. Kaiser held approximately 13.7% of the
Brazilian beer market in 2000 by volume (Nielsen).

     Schincariol, which held approximately 9.1% of the Brazilian beer market
in 2000 by volume, is a lower-priced beer produced by Cervejaria Schincariol
S.A. and is sold principally in the southeastern and northeastern region of
Brazil. Schincariol's products are generally priced at a discount to AmBev's
and Kaiser's products.

     Molson entered the Brazilian beer in 2000 market with the purchase of the
Bavaria brand and related assets from AmBev. The Bavaria brand held
approximately 4% of the Brazilian beer market in 2000 by volume. We expect
Molson to be a material competitor in our principal market.

     The remaining 4% of the Brazilian beer market in 2000 was accounted for
by small breweries and imported beers. Sales of imported beer are not
significant in Brazil, due to the high costs of shipping beer to Brazil and an
import tariff of 20% of the import price, except for products from Mercosur
countries, which are duty-free. We estimate that imports accounted for less
than 1% of total beer consumption by volume in 2000. However, several
super-premium or internationally recognized beers are being produced in Brazil
under license, including our Miller and Carlsberg brands and Heineken beer
(produced by Kaiser). We estimate that in 2000 these beers produced under
license in Brazil accounted for approximately 1% of total beer sales by
volume.

     Our largest competitor in the Argentine market is Quilmes, which, based
on our estimates, held a substantial majority of the beer market in 2000. Our
largest competitor in the Venezuelan market is Polar, which, based on our
estimates, held a substantial majority of the beer market in 2000. Our largest
competitor in Uruguay is Quilmes, which we estimate had a majority of that
market in 2000.

     Soft Drinks

     As with beer, soft drink manufacturers compete for market share through
brand preference, distribution, product availability, pricing, product
packaging, consumer promotions and service provided to retail outlets,
including merchandising equipment, maintenance of bottle inventories and
frequency of visits. In recent years, price discounting has been frequently
used as a means of increasing market share.

     Coca-Cola is the market leader in the soft drink market with a strong
competitive position. In 2000, Coca-Cola had a market share of approximately
50% of the Brazilian soft drink market (Nielsen). We anticipate that Coca-Cola
will continue to be a key competitor.


                                      33


<PAGE>


     Our core portfolio of soft drink brands (Guarana Antarctica, Pepsi and
Sukita) had a combined market share of approximately 17% in 2000 (Nielsen).
The approximate remaining 33% of soft drink volume comes from hundreds of
small regional companies who position their products, called tubainas, as
low-price "B-brands", focusing on low-income consumers. The tubainas have a
significant presence in the flavor segment, such as guarana, lemon, orange and
grape. Although B-brands have become a significant player in the consolidated
soft drink market, we believe that it will be difficult for them to grow
significantly beyond their current 33% market share, in part because B-brands
will find it increasingly difficult to avoid payment of taxes if they increase
in size. Improvements in tax collection will also put pressure on these
manufacturers to register accurately sales invoices. The following table sets
forth the estimated market shares, based on sales volume, of each major brand
portfolio of soft drinks in Brazil for each of the periods indicated:

                            Year Ended December 31,

Brand              2000     1999     1998      1997     1996     1995
-----            -------- -------- --------- -------- -------- --------
Coca-Cola.......   50%       48%      49%       50%      52%      52%
Antarctica......    10       11       12        12       13       14
Brahma..........     4        5        7        10        9        8
Pepsi...........     4        5        6         7        9        9
Other...........    33       32       26        21       18       18

------------------
Source: Nielsen

     The Brazilian soft drink market has historically been divided into three
pricing tiers, with Coca-Cola and Guarana Antarctica occupying the top
(highest-priced) tier. The second pricing tier consisted principally of our
Pepsi, Brahma Guarana and Soda Limonada products and Coca-Cola's Sprite and
Fanta products. The remaining soft drink brands and products, the B-brand
tubainas, occupy the third tier. Beginning in the first half of 1999, some of
Coca-Cola's Brazilian bottlers adopted a strategy of price discounting which
changed the prior pricing structure of the market, as reflected in the table
below, which shows the average prices of the most popular soft drinks sold in
the Brazilian market in 2000:

Brand                                                 Price (R$/2 liters)
-----                                                 -------------------
Coca-Cola.............................................       R$1.81
Soda Limonada Antarctica..............................         1.73
Guarana Antarctica....................................         1.69
Fanta Laranja.........................................         1.61
Seven Up..............................................         1.57
Sprite................................................         1.57
Pepsi.................................................         1.53
Sukita................................................         1.45
Brahma Guarana........................................         1.30

---------------------
Source:  Nielsen

     Coca-Cola's price discounting in 1999 and early 2000 was partly a
response to the growth in market share of B-brands, which had risen from 13%
in 1993 to 32.9% in 2000 according to Nielsen, driven largely by low prices
(B-brands sell at roughly half the price of premium brands), the use of large
non- returnable packaging such as two-liter PET bottles, and strong marketing
efforts by supermarkets. Despite the share growth of B-brands, premium brand
volume sales have risen 11% between 1995 and 2000 according to Nielsen, due in
part to improved economic conditions in Brazil. AmBev's strategy has been to
protect its margins by avoiding the kind of price discounting engaged in by
Coca-Cola, and to promote the use of returnable bottles, which generally are
more profitable to manufacturers.


                                      34


<PAGE>


Production and Availability of Raw Materials

     Beer and Soft Drink Production

     Beer production involves several raw materials and production stages. The
main ingredient in beer is malt, which is produced by germinating and roasting
barley in a process called "malting". Malt is mixed with water, hops and corn
grits or rice in the proportions necessary to obtain the desired taste. The
resulting mixture is called wort. Wort is fermented with selected yeasts to
produce beer, which is then filtered and bottled. In addition to these natural
ingredients, delivery of the product to consumers requires packaging such as
bottles, labels, crown caps and aluminum cans.

     As a result of significant capital investments in modernizing and
expanding our physical plants over the past decade, AmBev now has a number of
technologically advanced production facilities. Over two- thirds of AmBev's
facilities are certified under ISO 9001, ISO 9002 or ISO 14000. AmBev's former
Antarctica facilities are scheduled to begin the ISO certification process in
2001. In addition, as a result of our relations with Miller and Carlsberg,
AmBev has had access to production technology and processes used by other
leading international beer producers. For example, AmBev utilizes a
micro-filtration process used by Miller in producing Miller Genuine Draft
beer, which has the result of prolonging the shelf life of draft beer without
pasteurization.

     The different beer brands share the same production process until the
filtration stage, relatively late in the brewing process, thus maintaining
production efficiency.

     Soft drinks are produced by mixing water, flavored concentrate and
sweetener. Water is processed to eliminate mineral salts and filtered to
eliminate impurities. Purified water is combined with processed sugar or, in
the case of diet soft drinks, with artificial sweeteners, and concentrate.
Carbon dioxide gas is injected into the mixture to produce carbonation.
Immediately following carbonation, the mixture is bottled.

     AmBev believes that most of its supply agreements for raw materials
contain standard commercial terms. AmBev is not dependent on any one supplier
for a significant portion of its raw materials and the loss of any one or
limited group of suppliers would not have a materially adverse effect on its
sources of supply. In the past five years, AmBev has not experienced any
material difficulties in obtaining adequate supplies of raw materials at
satisfactory prices.

For information on AmBev's production facilities, see "--Property, Plant and
Equipment".

     Raw Materials

         Beer

     The principal raw materials used in AmBev's production of beer are
malting barley, corn syrup, rice, hops and water.

     Barley and Malt. Malt requirements are met by local and international
suppliers and our own malting facilities. In the recent past, AmBev has
purchased as much as 25% of its malt in international markets outside of South
America, at prevailing market rates, which depend partially on the quality of
the barley harvests, and the remaining 75% within South America. AmBev has the
ability to produce over half of its malt needs from its own malting facilities
in Brazil, Argentina and Uruguay. AmBev can either sell part of its malt
production to third parties or use it in its own production. AmBev contracts
its annual malt needs in the last quarter of the year for the following year's
requirements.

     Market prices of barley and malt have been relatively volatile. For
instance, we estimate that the average price of malt FOB Europe in 2000 was
approximately US$260 per ton, compared to US$384 per ton in 1996. We believe
that having our own production facilities helps to partly offset this price
volatility.


                                      35


<PAGE>


     Hops. There are two types of hops used in AmBev's beer production: hops
used to give beer its distinctive bitter flavor, which AmBev generally imports
from the United States, and hops used to give beer its distinctive aroma,
which AmBev generally imports from Europe. AmBev acquires hops from several
international suppliers. Typical import contracts are entered into for
three-year terms.

     Water. Water represents a small portion of raw material costs. Water
needs to be treated both before its use in the production process and before
disposal. AmBev obtains its water requirements from lakes and reservoirs, from
deep wells located near its breweries, from rivers adjoining its plants and
from public utilities. AmBev monitors the quality, taste and composition of
the water it uses, and treats it to remove impurities and to comply with its
own quality standards and applicable regulations. As a result of advances in
technology, AmBev has reduced its water consumption per hectoliter produced.
AmBev does not foresee any shortage in its current water supply.

     Substantially all other raw materials, including corn syrup and rice, are
purchased locally.

         Soft Drinks

     The principal raw materials involved in the manufacture of AmBev's soft
drink products include concentrate (including guarana extract), sugar,
sweetener, water and carbon dioxide gas. Most of these materials are obtained
from local suppliers. AmBev also has a 550 hectare facility that provides us
with 50 to 60 tons of guarana seeds per year, about 18% of AmBev's
requirements, with the remainder purchased directly from independent farmers
in the Amazon region. AmBev produces its own concentrates for its own soft
drink production and mixes the concentrate with sugar and carbonated water at
its soft drink and mixed production facilities. The concentrate for Pepsi soft
drink products is purchased from PepsiCo.

     AmBev produces all of the fruit juice pulp and concentrate that it uses
to produce fruit flavored soft drinks using fruit purchased from large
commercial suppliers.

     Packaging

     Packaging costs comprise the cost of nonreturnable glass bottles,
aluminum cans, steel kegs, labels, closures, crown caps and paper. The higher
cost of glass bottles relative to aluminum cans is offset by their longer
useful life.

     Until 1996, Latas de Aluminio S.A.-Latasa was the sole supplier of cans
in Brazil. Following a period of favorable foreign exchange rates which caused
the cost of imported aluminum to be reduced, new can producers such as
Latapack Ball entered the Brazilian market, encouraged by AmBev in order to
promote competition. As a result of increased competition, commencing in 1998
the price of cans fell to international levels, and AmBev increased its sales
of canned products from 17% in 1997 (for Brahma) to 25% in 2000 for beer, and
from 12% in 1997 to 23% in 2000 for soft drinks. In 1999, Brahma started to
explore the use of steel cans, which are acquired from Companhia Metallic
Nordeste, to mitigate a possible rise in the cost of aluminum.

     AmBev generally purchases all of the glass bottles used in packaging its
beverage products from St. Gobain Emballage, Owens-Illinois Glass Containers
and Companhia Industrial de Vidros. AmBev obtains the labels for its beer and
soft drink products principally from local suppliers, Dixie/Toga and Grafica,
a subsidiary of the Zerrenner Foundation. Closures and crown caps are
principally purchased from Alcoa Aluminio and Petropar (in the case of
closures) and from five other local suppliers.

     Most of AmBev's plants have polyethylene terephthalate (PET) blowing
facilities provided by bottle manufacturers. PET is the material used to make
one-way plastic bottles for soft drinks. On-premises PET blowing allows for
substantial savings in transportation and storage costs. We also purchase non-
returnable plastic bottles from several suppliers, principally Plastipack and
Petropar. We recently


                                      36


<PAGE>


introduced shrink-wrap containers for our packages of multiple plastic bottles
and cans to reduce production and transportation costs.

Research and Development

     AmBev maintains a state-of-the art pilot brewery and laboratory at its
plant in Guarulhos, staffed by 12 employees, to test new brewing processes and
products. We conduct research regarding developments in the beverage market on
an ongoing basis. Our process technology standardization program allows us to
monitor production processes, standardize operations and train personnel. This
provides us with increased control over our manufacturing processes. In
addition, the productivity program identifies opportunities for operational
and technological improvements in our facilities. The systematic monitoring of
performance has enabled us to maximize our production facilities while
reducing fixed and variable costs. We are actively engaged in agricultural
research and development to improve the quality of the barley and guarana used
in our beer and soft drink production. Agricultural research takes place on
40.8 hectares of land devoted to barley and 505 hectares of land devoted to
guarana.

Regulation

     General

     Unlike many other countries, Brazil does not heavily regulate the
production and marketing of alcoholic beverages. In Brazil, it is illegal to
serve alcoholic beverages to persons under 18 years of age. There are no
significant regulations, other than compliance with standards imposed by food
and health regulatory agencies, applicable to the production and marketing of
soft drinks and non-carbonated beverages in Brazil. In addition, there are no
licensing requirements for points of sale to sell our beer and soft drink
products. For a description of the environmental regulations we are subject
to, see "--Property, Plant and Equipment--Environmental Matters".

     Environmental Matters

     We are subject to Federal, State and local laws and regulations in
Brazil, Argentina, Venezuela and Uruguay relating to pollution, the protection
of the environment, the management and disposal of hazardous materials and the
cleanup of contaminated sites. In particular, these laws regulate, among other
things, air and effluent emissions and require hazardous waste disposal sites
to conform with environmental standards. Administrative, criminal and civil
penalties, including cleanup costs, may be imposed for noncompliance with or
liabilities under environmental laws.

     In addition to applicable laws, we are subject to compliance with World
Bank environmental standards pursuant to a loan facility entered into with the
International Finance Corporation (IFC). As part of our compliance with these
environmental standards, in 1995 Brahma completed the upgrade of the
wastewater treatment systems at its facilities. Currently, we maintain modern
effluent treatment systems in each of our plants, which reduce organic
effluents by 95%, as required by applicable legislation. In addition, much of
our industrial waste, which is predominantly non-hazardous in nature, is
either recycled or sold to third parties.

     In 1998, one of Antarctica's subsidiaries, Antarctica da Amazonia S.A.,
entered into an agreement with the Brazilian Federal environmental agency
(IBAMA), under which it committed to maintain and preserve legally protected
areas under Brazilian environmental laws and native species of Brazilian nut
trees and rubber trees, which are part of the rural property of Fazenda Santa
Helena, and not to use some herbicide and biocide products in the farming of
guarana. Fazenda Santa Helena is a cultivation site for the guarana seed,
which is used as the main raw material in the production of the guarana soft
drinks by Antarctica. One of CBB's current subsidiaries, Industria de Bebidas
Antarctica do Norte--Nordeste S.A.


                                      37


<PAGE>


(Norte--Nordeste), is the successor to Antarctica da Amazonia S.A.'s
obligations under the agreement with IBAMA.

     Several years ago, AmBev initiated an internal environmental policy
program to help ensure compliance with environmental regulations and,
beginning in 1995, established an integrated environmental management system
by hiring and training environmental supervisors. After the combination, this
policy was extended to Antarctica's plants. Our environmental department
includes professionals who are exclusively dedicated to the environmental
management of our plants, regularly reviewing and, if necessary, revising our
environmental policies, conducting environmental evaluations of our plants and
training our employees in environmental matters. In addition, we support
environmentally friendly projects, including a recycling project and urban
community education projects. In 1998, our Minas Gerais-Juatuba facility
became the world's first brewery to receive ISO 14001 certification by the
Bureau Veritas, the international standard board for ensuring the consistent
and measurable quality of environmental controls. As of March 31, 2001, we
have nine plants with this certification.

     For a number of years, Brahma and Antarctica have made, and AmBev
continues to make, significant capital expenditures to upgrade and maintain
their facilities in compliance with applicable environmental laws and
requirements. Recent expenditures incurred in Brazil, Argentina and Venezuela
are as follows:

              AmBev Capital Expenditures on Environmental Matters

                                          Year Ended December 31,
                                     ----------------------------------
                                       2000     1999     1998     1997
                                     -------- -------- -------- --------
                                                 (US$ millions)

Property, plant and equipment........ US$0 .9  US$1.4  US$  5.7  US$16.2
Waste treatment......................    17.5     6.9      15.4      7.8
                                     -------- -------- --------- --------
                                      US$18.4  US$8.3   US$21.1  US$24.0
                                      =======  ======   =======  =======

     We expect to spend similar amounts on maintaining and upgrading our
facilities in upcoming years. Budgeted environmental expenditures of AmBev for
the five-year period ending December 31, 2005 total approximately US$102
million. However, additional operating costs and capital expenditures could be
incurred if additional or more stringent requirements relevant to our
operations are imposed.

     We believe that our current operations are in substantial compliance with
applicable environmental laws and regulations. We are, however, currently
engaged in litigation under Brazilian environmental laws and regulations
relating to two of our facilities. See "Item 8--Financial
Information--Consolidated Statements and Other Financial Information--Legal
Proceedings--Environmental Matters".

Intellectual Property

     Trademarks

     As of April 16, 2001, AmBev had 985 trademarks registered with the
Brazilian Institute of Industrial Property (INPI), and used four third-party
trademarks under specific license agreements (Miller, Carlsberg, Pepsi and
Lipton). All of these trademarks are protected in all material respects in
Brazil. In addition, AmBev has registered its main trademarks or initiated
trademark registration processes in 93 countries outside of Brazil, including
Argentina, Venezuela, Uruguay and the United States, in order to ensure
protection of the names and logos.

     The most important trademarks of AmBev, including names and logos, are
the following: AmBev, Brahma, Brahma Chopp, Skol, Sukita, Brahma Guarana,
Caracu, Limao Brahma, Malzbier, Fratelli Vita, Marathon, Antarctica,
Antarctica Pilsen, Bohemia, Guarana Antarctica, Polar Pinguim, Polar Export,
Kronenbier, Bare, Bare-Cola and Guarana Champagne (registered in Brazil),
Guarana Antarctica (registered outside of Brazil), Soda Limonada Antarctica,
Agua Tonica Antarctica, and


                                      38


<PAGE>


Nectar. There are no unregistered trademarks in Brazil which are material to
the business of AmBev. In Brazil, trademark registration has a term of
validity of 10 years, after which it can be renewed for additional 10-year
periods. The application for renewal of a trademark must be submitted to the
INPI in the last year of validity of the trademark registration, or within six
months after the trademark expiration date upon payment of an additional fee.
A renewal is only refused by the INPI in the event that any third party argues
that the trademark has lapsed due to lack of use during the prior five years,
and such fact is deemed by the INPI to have been proven. AmBev expects to
apply for renewal of registration of all of its material trademarks, so as to
avoid their expiration. There are no material trademarks of AmBev expected to
lapse in the near future.

     AmBev believes that its significant trademarks are protected in all
material respects in the markets in which it currently operates.

Organizational Structure

     AmBev is a holding company. The bulk of our operations are conducted
through approximately 13 principal operating subsidiaries in four countries,
with a total of approximately 17,500 employees at the end of 2000. We are
currently restructuring the assets and liabilities of our subsidiaries. The
principal components of the restructuring completed to date have been the
transfer of substantially all the assets and liabilities of CRBS S.A., PepsiCo
Engarrafadora Ltda. and Cervejarias Reunidas Skol to Brahma as of November 1,
2000, and the merger of Brahma into CBB (formerly Antarctica) on March 31,
2001.

     The following chart illustrates the ownership structure of AmBev's
principal subsidiaries as of May 1, 2001. For a complete list of our material
subsidiaries, see Exhibit 8.1 to this annual report.


                                      39


<PAGE>

                           ORGANIZATIONAL STRUCTURE
                AmBev and its Principal Operating Subsidiaries


[GRAPHIC OMITTED]


                                      40


<PAGE>


Property, Plant and Equipment

     AmBev's properties consist primarily of brewing, malting, bottling,
distribution and office facilities in Brazil, Venezuela, Argentina and
Uruguay.

     AmBev currently has 46 facilities, of which 37 are beverage plants,
including 16 breweries (12 in Brazil, 2 in Uruguay, and 1 each in Argentina
and Venezuela); 8 soft drink plants which produce Brahma, Pepsi and Antarctica
brand soft drinks; and 13 mixed plants which produce both beer and soft
drinks. Our aggregate beer and soft drink production capacity is 131 million
hectoliters per year. In 2000, we utilized 68% of our beer and 50% of our soft
drink capacity, respectively, leaving an aggregate excess capacity of 49
million hectoliters per year. The total annual beer production capacity of
AmBev is 94.4 million hectoliters, of which 89.1 million hectoliters is in
Brazil, 2.3 million hectoliters is in Argentina, 2.2 million hectoliters is in
Venezuela and approximately 0.75 million hectoliters is in Uruguay. AmBev
expanded its Argentine brewery by 50% and added two packaging lines: aluminum
cans in January 1998 and returnable bottles in mid-1998. AmBev's total soft
drink production capacity is 36.6 million hectoliters, which includes the
production of Brahma, Pepsi and Antarctica brand soft drinks.

     AmBev also owns and operates four malt plants, one of which is in Brazil,
one in Argentina and two in Uruguay. AmBev's malt plant in Argentina is
operated by its subsidiary, Malteria Pampa S.A., which holds 100% of Malteria
Uruguay S.A., which owns another malt plant in Uruguay.

     AmBev also operates one concentrate plant, 505 hectares of agricultural
land which it uses for guarana production and research, and three barley
growing facilities.

     In addition, AmBev rents office facilities in Sao Paulo. The following is
a list of our principal production facilities:

Brazil

     Plant                                       Type of Plant
     -----                                       -------------
Aguas da Serra, Sao Paulo                             beer
Agudos, Sao Paulo                                     beer
Brasilia, Federal District                            beer
Curitiba, Parana                                      beer
Equatorial, Maranhao                                  beer
Estrela, Rio Grande do Sul                            beer
Goiania, Goias                                        beer
Jacarei, Sao Paulo                                    beer
Lages, Santa Catarina                                 beer
Montenegro, Rio Grande do Sul                         beer
Natal, Rio Grande do Norte                            beer
Joao Pessoa, Paraiba                                  beer

Aguas Claras, Sergipe                                 mixed
Aquiraz, Ceara                                        mixed
Camacari, Bahia                                       mixed
Cebrasa, Goias                                        mixed
Cuiaba, Mato Grosso                                   mixed
Jaguariuna, Sao Paulo                                 mixed
Jacarepagua, Rio de Janeiro                           mixed
Nordeste, Pernambuco                                  mixed


                                      41


<PAGE>


Nova Rio, Rio de Janeiro                              mixed
Manaus, Amazonas                                      mixed
Minas, Minas Gerais                                   mixed
Teresina, Piaui                                       mixed
Aguas Claras do Sul, Santa Catarina                   mixed

Astra, Ceara                                          soft drinks
Curitibana, Parana                                    soft drinks
Contagem, Minas Gerais                                soft drinks
Fratelli Vita, Bahia                                  soft drinks
Jundiai, Sao Paulo                                    soft drinks
Olinda, Pernambuco                                    soft drinks
Paulinia, Sao Paulo                                   soft drinks
Sapucaia, Rio Grande do Sul                           soft drinks

Maltaria Navagantes-Porto Alegre, Brazil              malt

International

Plant                                            Type of Plant

CACN, Venezuela                                       beer
CCBA, Argentina                                       beer
Cympay, Uruguay                                       beer
Salus, Uruguay                                        beer
Malteria Uruguay, Paysandu, Uruguay                   malt
Malteria Pampa, Argentina                             malt
Cympay, Paysandu, Uruguay                             malt

     All of our facilities are owned by AmBev or its subsidiaries, and none of
AmBev's plants are leased from third parties. The facilities and/or equipment
in Agudos, Jacarei, Minas Gerais, Nordeste, Guarulhos, Aguas Claras (Sergipe),
Aguas Claras do Sul, Rio de Janeiro, Brasilia, Teresina, Goiania, Jaguariuna,
Manaus, Montenegro, Aquiraz, Santa Catarina , Cebrasa, Curitiba and Sapucaia
branches are encumbered by mortgages to secure long-term loans from the IFC,
the Brazilian Economic and Social Development Bank (BNDES) and/or other
lenders. The mortgages were provided in connection with financing provided to
Brahma and Antarctica to modernize their plants.

     AmBev insures its plants and equipment against damage or loss with
reputable insurers. In addition, AmBev carries product liability insurance.
AmBev does not carry business interruption insurance, which is not available
in Brazil on terms that AmBev considers to be commercially reasonable. AmBev
believes that the type and amount of insurance it carries conforms with market
practices for Brazilian beverage companies and provides prudent levels of
coverage for risks associated with AmBev's operations.

     AmBev believes that its facilities are adequate in all material respects
for the needs of its current and anticipated business operations. However,
Brazilian authorities have recently announced that they will be forced to
ration power supplies due to reduced hydroelectric generation caused by recent
droughts. Our production, and the production of some of our key suppliers, is
substantially dependent on a steady


                                      42


<PAGE>


supply of electricity. Electricity shortages could therefore negatively affect
our production capacity and harm our sales, particularly during the summer
months when demand for our products is at its peak.

History and Development of the Company

     For information on the formation of AmBev and the combination of Brahma
and Antarctica, see "The Combination and Brazilian Antitrust Approval".

     Companhia de Bebidas das Americas - AmBev (AmBev) was incorporated on
September 14, 1998. AmBev is a publicly held corporation incorporated under
Law No. 6,404 of December 15, 1976, as amended (the Brazilian corporation
law), of the Federative Republic of Brazil. Prior to July 1, 1999, it had no
operations. On July 1, 1999, the controlling shareholders of Brahma and
Antarctica agreed to contribute all of their common and preferred shares in
Brahma and Antarctica in exchange for shares of the same type and class of
AmBev (the controlling shareholders' contribution). AmBev is domiciled in Sao
Paulo, SP, Brazil, and its principal executive offices are located at Avenida
Maria Coelho Aguiar, 215, Bloco F, 6(degree) floor, CEP 05804-900, Sao Paulo,
SP, Brazil, Tel.: (55-11) 3741-7000.

     AmBev is the accounting successor of Companhia Cervejaria Brahma
(Brahma). Brahma was founded in 1888 as Villiger & Cia., and prior to its
merger into Antarctica was one of the oldest brewers in Brazil. The Brahma
brand was registered on September 6, 1888, and in 1904 Villiger & Cia. changed
its name to Companhia Cervejaria Brahma.

     Public Takeover Offers

         Public Offer for the Acquisition of Shares of Polar and Norte Nordeste

     On May 22, 2000, AmBev announced a public offer for the acquisition of
the shares of the minority shareholders of Polar, a publicly held subsidiary
of AmBev. The tender required approval at a shareholders' meeting of Polar and
by the CVM before it could be extended to the minority shareholders. The
public offer was intended to allow for the delisting of the shares of Polar
from the Sao Paulo Stock Exchange and the cancellation of its registration as
a publicly held corporation with the CVM.

     The public offer for Polar shares was completed on April 17, 2001, when
we acquired the percentage of shares necessary to effect the delisting of
Polar from the Sao Paulo Stock Exchange and the cancellation of its
registration as publicly held corporation with the CVM. AmBev has acquired
12,513,347 common shares and 21,214,714 preferred shares of Polar, totaling
95.66% of Polar's share capital. The minority shareholders that are holders of
the remaining 0.71% shares of Polar may sell their shares to AmBev within 180
days from the shareholders' meeting that approved the financial statements of
Polar relating to the fiscal year immediately following the cancellation of
its registration as a publicly held corporation, on the same terms offered to
the others. AmBev spent a total of approximately US$41.1 million on such share
purchase. AmBev expects that the completion of the delisting from the Sao
Paulo Stock Exchange and the cancellation of the registration with the CVM
will occur by the end of 2001.

     AmBev had previously announced an intent to pursue a voluntary public
offer for the acquisition of the shares of the minority shareholders of Norte
Nordeste. Due to a recent CVM ruling, however, AmBev recently decided not to
pursue this voluntary public offer.

     Merger and Name Change

     On March 31, 2001, Brahma was merged into Antarctica, and Antarctica
changed its name to Companhia Brasileira de Bebidas.


                                      43


<PAGE>


     AmBev Reorganization

     Prior to Brahma's recent merger into Antarctica (see above), AmBev
restructured the assets and liabilities of certain of its subsidiaries. The
principal components of the restructuring were the transfer of substantially
all the assets and liabilities of CRBS S.A., PepsiCo Engarrafadora Ltda. and
Cervejarias Reunidas Skol to Brahma as of November 1, 2000.


                                      44


<PAGE>


Item 5.  Operating and Financial Review and Prospects

                               OPERATING RESULTS

Introduction

     This section contains forward-looking statements that involve risks and
uncertainties. Our actual results may differ materially from those discussed
in the forward-looking statements as a result of various factors including,
without limitation, those set forth in "Cautionary Statement Regarding
Forward- Looking Information" and the matters set forth in this annual report
generally.

     The following discussion is based on and should be read in conjunction
with AmBev's audited consolidated financial statements as at December 31, 2000
and for the three-year period then ended including the notes related to them,
appearing elsewhere in this annual report, as well as Antarctica's audited
consolidated financial statements as at December 31, 1999 and for the two-year
period then ended, including the notes related to them, incorporated by
reference into this annual report. The AmBev and Antarctica financial
statements have been prepared in U.S. dollars in accordance with U.S. GAAP.
AmBev and Antarctica also prepare financial statements in Brazil in reais in
accordance with accounting principles set forth in the Brazilian corporation
law (Law 6404/76, as amended), which are filed with the Brazilian securities
commission and used, among other things, for determining dividend payments and
tax liabilities in Brazil. Those financial statements are not included in this
annual report.

Accounting Aspects of the Combination

     Prior to July 1, 1999, the date of the controlling shareholders'
contribution, AmBev had no material assets, liabilities or operations.
However, for accounting purposes AmBev is treated as the successor to Brahma.
As a result, the financial statements of AmBev as of December 31, 1998, 1997
and 1996 and for the years ended December 31, 1998, 1997 and 1996 are
substantially the same as the financial statements of Brahma as of such dates
and for such periods. As described below, the financial statements of AmBev as
of any date and for any period ending after June 30, 1999, reflect the
combination of Brahma and Antarctica.

     AmBev obtained voting control of Antarctica on July 1, 1999. However,
AmBev was subject to interim measures imposed by CADE limiting AmBev's ability
to integrate the operations of Brahma and Antarctica. See "The Combination and
Brazilian Antitrust Approval". As a result of those interim measures, AmBev
was not deemed to have a controlling financial interest in Antarctica for
accounting purposes. Consequently, AmBev accounted for its interest in
Antarctica under the equity method for the period from July 1, 1999 to March
31, 2000. On April 7, 2000, CADE effectively approved AmBev's acquisition of
control of Antarctica and those interim measures ceased to apply, thereby
allowing AmBev to consolidate Antarctica for accounting purposes. Accordingly,
as of April 1, 2000, Antarctica has been consolidated in AmBev's financial
statements.


                                      45


<PAGE>


     The acquisition of Antarctica resulted in a purchase price for accounting
purposes that exceeded the book value of Antarctica's assets by US$229.6
million. The excess purchase price was allocated to the assets of Antarctica
based on the fair value of assets as at June 30, 1999 as follows:

                                                      Depreciable   Amounts
                                                        lives       --------
                                                      ----------- (in millions)

Tangible assets--property, plant and equipment......    10 years    US$  72.7
Trademarks..........................................    40 years        175.0
Distribution networks...............................    30 years         50.0
Software............................................     5 years          7.6
Book versus tax (temporary difference at date of
     acquisition)...................................                   (75.8)
                                                                    ----------
         Excess purchase consideration allocation...                 US$229.6
                                                                     ========

Other Acquisitions and Dispositions

     In 1997 AmBev acquired Pepsi-Cola Engarrafadora Ltda. and PCE Bebidas
Ltda., PepsiCo bottlers in southern and southeastern Brazil and at the same
time acquired the exclusive rights to produce, sell and distribute PepsiCo
soft drink products in northeastern Brazil. The acquisition gave rise to
US$39.8 million (at the then-current exchange rate) of goodwill as of December
31, 1997 (which is being depreciated over a 10-year period). In 1999, AmBev
obtained the exclusive rights to produce, sell and distribute PepsiCo soft
drink products throughout Brazil. See "Item 4--Information about the
Company--AmBev's Business Overview--Our Products and Brands--Joint Ventures
and Strategic Alliances". AmBev has made a number of smaller acquisitions in
recent years. See Note 1(b) to AmBev's consolidated financial statements.

     In 1988, we acquired 40% of Malteria Pampa S.A. which owns and operates a
malt plant in Argentina and a malt plant in Uruguay. In 1998, AmBev acquired
the remaining 60% of Malteria Pampa S.A.'s shares for US$ 52.8 million which
gave rise to US$ 33.1 million (at the then-current exchange rate) of goodwill
(which is being depreciated over a 40-year period). See Note 1(b)(viii) to
AmBev's consolidated financial statements.

     On November 6, 2000, AmBev entered into stock and distribution agreements
providing for the sale of Bavaria S.A. to Molson Inc. See "The Combination and
Brazilian Antitrust Approval--Brazilian Antitrust Approval". Unless otherwise
stated, the historical operating and financial data of Antarctica and of AmBev
includes the operations of Bavaria through October 31, 2000. In 2000, Bavaria
accounted for US$79.5 million of our net sales.

Reporting Currency and Foreign Currency Effects

     Our functional currency is the real. However, we have elected to present
the financial statements included herein in U.S. dollars. Therefore, for each
year in the three-year period ended December 31, 2000, we translated all
assets and liabilities into U.S. dollars at the then-current exchange rates at
the balance sheet dates and all accounts in the statements of operations and
cash flows at the average rates of exchange in effect during those periods.
The related translation adjustments are included in the cumulative translation
adjustment account in shareholders' equity. Foreign exchange transaction gains
or losses are reflected directly in income.

     Changes in foreign exchange rates have had and are expected to continue
to have significant effects on our results of operations and financial
condition. See "Item 3--Key Information--Exchange Rate Information", "Item
3--Key Information--Risk Factors--Factors Relating to Brazil--Substantial
exchange rate fluctuations could harm AmBev and reduce the market value of our
securities" and "Item 4--Information on the Company--Brazilian Beverage
Industry Overview". The real depreciated by 8.5%, 32.4% and 7.6% against the
U.S. dollar in 2000, 1999 and 1998, respectively. Because a substantial
portion of our operating expenses and a substantial portion of our debt is
denominated in or


                                      46


<PAGE>


linked to U.S. dollars, while substantially all of our revenues are
denominated in reais, we currently seek to hedge substantially all of our U.S.
dollar-denominated debt through a variety of means, including foreign currency
swaps and forward contracts. However, there can be no assurance that we will
at all times in the future decide to or be able to hedge our foreign currency
exposure. In addition, we have historically maintained large balances of cash
equivalents and trading securities. Generally, we invest those balances in
both real- and dollar-denominated instruments in proportions that vary from
time to time. Changes in foreign exchange rates will also affect the value of
those financial assets and our results, depending on the extent to which those
assets are invested in real- or dollar-denominated instruments.

     The Brazilian general price index, the devaluation of the Brazilian
currency against the U.S. dollar and the period-end and average exchange rates
are set forth below:
<TABLE>
<CAPTION>
<S>                                              <C>      <C>        <C>       <C>     <C>
                                                          Year ended December 31,
                                                         ------------------------
                                                 2000      1999      1998     1997    1996
                                                ------    ------    ------   ------   -----
Inflation (Brazilian IGP-DI)................     9.8%      20.0%     1.7%      7.5%    9.3%
Nominal devaluation of the real against the
     U.S. dollar ...........................     8.5%      32.4%     7.21      6.9%    6.4%
Period-end exchange rate:
     US $1.00/R$...........................    R$1.96     R$1.79   R$1.21    R$1.12  R$1.04
Average exchange rate(1):                      R$1.83     R$1.86   R$1.16    R$1.08  R$1.01
     US $1.00/R$............................
</TABLE>

--------------------
(1)  Represents the average of the month-end exchange rates during the
     relevant period.

Taxes

     The composite income tax and social contribution tax rate used for
establishing our net deferred tax asset for 1997 through 2000 was 33%. Our
effective tax rate on income differs significantly from the statutory
composite tax rate. The major reasons for the differences have been the
effects of certain non- deductible permanent differences (primarily tax
contingency provisions and occasionally reversals thereof), different foreign
tax rates and tax planning measures, valuation allowances against net
operating losses and reversals thereof, benefits arising from payments of
interest on shareholders' equity and re- filings of tax returns following
changes in interpretation of certain deductions. For 2000, 1999 and 1998, our
effective tax rate was a benefit of 134.5%, 42.1% and 69.4%, respectively, of
pre-tax income.

     We have tax loss carryforward assets available for offset of US$323.7
million at December 31, 2000 including the Antarctica losses, but excluding
certain contingent assets accruing from the acquisition of Pepsi-Cola
Engarrafadora Ltda. and PCE Bebidas Ltda. in 1997 which we have not recorded.
Income tax losses available for offset in Brazil (92.6% of our gross losses at
December 31, 2000) do not expire. However, the annual offset is limited to 30%
of taxes payable. We have valuation allowances against our tax loss
carryforward assets of US$45.7 million at December 31, 2000.

     In October 2000, we implemented a significant restructuring of our
operating companies in Brazil in order to optimize our income tax losses
available for offset and our tax timing differences. This enabled us to
recognize and book in income net deferred tax assets of US$19.3 million from
the Brahma group companies and US$233.2 million from the Antarctica group
companies. At the time we acquired Antarctica on July 1, 1999, the CADE
interim restrictions precluded not only our consolidation of Antarctica but
also caused significant doubts as to our ability to recover its tax losses;
accordingly, we did not include the Antarctica tax assets as part of the net
assets acquired.

     During 2000, AmBev also restructured its holdings in certain offshore
entities, primarily investment companies in Uruguay, as a tax planning
measure. This restructuring resulted in certain foreign earnings for 1998,
1999 and first quarter of 2000, no longer being subject to tax. This resulted
in a benefit to net


                                      47


<PAGE>


income in 2000 of US$ 146.2 million. Similarly, the deferred tax liability was
partially reversed to income in 1998 (US$ 18.6 million) following the
enactment of a law which confirmed that such earnings will be taxed upon
repatriation on a prospective basis.

     In common with many companies in Brazil, AmBev has from time to time
contested the legality of certain direct and indirect taxes on the grounds
that they infringe on AmBev's constitutional rights. If AmBev is not required
to pay the tax until a final judicial determination is made, AmBev records a
provision in the amount of the tax. In the event that a final judicial ruling
is rendered in favor of AmBev, the provision is reversed to income. At
December 31, 2000, we have recorded contingency provisions against probable
and reasonably estimable losses arising from income and indirect tax
assessments and positions taken by AmBev totaling US$206.1 million, an
increase over the provisions recorded at December 31, 1999, which excluded
Antarctica of US$104.9 million.

Consolidation of the Zerrenner Foundation and Effect on Earnings Per Share

     On October 27, 2000, we restructured our employee benefit programs by
merging the Brahma Welfare Foundation into the Zerrenner Foundation. The
Zerrenner Foundation is one of the three controlling shareholders of AmBev and
is a party to the shareholders' agreement described in "Item 7--Major
Shareholders and Related Party Transactions--Major Shareholders--AmBev
Shareholders' Agreement". The Zerrenner Foundation, pursuant to the terms of
its by-laws, provides medical, dental, educational and social assistance
benefits to current and retired employees of AmBev and their beneficiaries and
covered dependents. The Zerrenner Foundation is also permitted, pursuant to
the terms of its by-laws, to provide benefits to persons and projects
unrelated to AmBev, although the Zerrenner Foundation has historically used
its assets almost exclusively for the benefit of employees of Antarctica with
their dependents. AmBev is permitted to contribute up to 10% of its Brazilian
corporation law consolidated net income to support the Zerrenner Foundation.

     As part of the process of merging the Brahma Welfare Foundation into
Zerrenner Foundation, an actuarial evaluation was carried out to determine the
level of AmBev contributions required to enable the Zerrenner Foundation to
provide benefits for all AmBev employees comparable to the benefits formerly
provided by the Brahma Welfare Foundation to Brahma employees without having
to sell the shares of AmBev held by the Zerrenner Foundation. Based on the
actuarial evaluation, AmBev would need to contribute approximately R$100
million over the next several years in order for the Zerrenner Foundation to
be able to provide such benefits. On April 27, 2001, as permitted by our
by-laws, we made a contribution of US$9.0 million to the Zerrenner Foundation.
See Note 21(b) to AmBev's consolidated financial statements.

     The Zerrenner Foundation is managed by a Council, an Advisory Council and
a Permanent Benefits Commission. The Council consists of a minimum of seven
counsilors and a maximum of nine counsilors. As a result of the merger of the
Brahma Welfare Foundation and the Zerrenner Foundation, AmBev has the right to
appoint two of the Zerrenner Foundation's counsilors. The remaining counsilors
are self- appointed by the existing counsilors of the Zerrenner Foundation.

     Due to the significant influence that AmBev can exert over the decisions
of the Zerrenner Foundation, AmBev's right to nominate certain counsilors, and
the fact that disbursements made by the Zerrenner Foundation are almost
exclusively for the benefit of AmBev's employees, we have consolidated the net
assets of the Zerrenner Foundation on our balance sheet. A substantial part of
the assets of the Zerrenner Foundation consist of shares of AmBev. Because we
have consolidated the assets of the Zerrenner Foundation, we have included the
AmBev shares owned by the Zerrenner Foundation as treasury shares, rather than
as outstanding shares, on our balance sheet, thereby reducing the weighted
average number of the number of our outstanding shares. However, for all other
purposes, including the right to receive dividends and the right to vote, the
AmBev shares owned by the Zerrenner Foundation are treated the same way any
other outstanding shares are treated.


                                      48


<PAGE>


     One of the effects of our treating the AmBev shares owned by the
Zerrenner Foundation as treasury shares is to reduce the number of outstanding
shares used in calculating our earnings or loss per share. That results in an
increase of our earnings or loss per share. At December 31, 2000, there were
22,144,351,240 and 12,328,741,785 AmBev preferred and common shares,
respectively, outstanding, excluding shares owned by the Zerrenner Foundation.
At December 31, 2000, the Zerrenner Foundation owned 471,666,665 and
3,621,305,410 AmBev preferred and common shares, respectively. Thus, treating
the AmBev shares owned by the Zerrenner Foundation as treasury shares (but in
2000 excluding the shares previously owned by the Brahma Welfare Foundation)
resulted in a reduction of the weighted average number of outstanding
preferred and common shares of 0.2% and 2.6%, respectively. However, the
Zerrenner Foundation was consolidated for purposes of our earnings or loss per
share calculation for only two months in 2000. Therefore, in future periods
the effect of the consolidation of the Zerrenner Foundation on our earnings
per share will be much more significant.

Presentation of Segment Financial Data

     AmBev's business is comprised of two main segments: beer and soft drinks,
which together accounted for, 97.8%, 97.4% and 97.2% of AmBev's net sales in
2000, 1999 and 1998, respectively, and 100% of Antarctica's net sales in 1999.
AmBev reports its business segment data in its U.S. GAAP financial statements
in accordance with SFAS No. 131, "Disclosures about Segments of an Enterprise
and Related Information". SFAS No. 131 requires that segment data be presented
on the basis of the internal information that is used by management for
assessing performance and making operating decisions, including decisions
regarding the allocation of resources among segments. Because AmBev evaluates
and manages segment performance based on information generated from its
statutory accounting records which are maintained in accordance with Brazilian
corporation law, the segment data included in AmBev's U.S. GAAP financial
statements is presented under Brazilian corporation law accounting principles,
with certain exceptions described below.

     The segment financial information presented below has been translated
from reais into U.S. dollars at the average rate for each period presented.
Although the underlying data has been prepared in accordance with accounting
principles set forth in Brazilian corporation law, some expenses have not been
allocated to the segments as would be required under Brazilian corporation
law, including corporate overhead, minority interests, income taxes and
financial income and expense. In addition, although our Brazilian corporation
law financial statements effectively consolidate Antarctica as of July 1,
1999, the segment data included below and in our consolidated financial
statements does not include the results of Antarctica for any period prior to
April 1, 2000.


                                      49


<PAGE>


Year Ended December 31, 2000 Compared with Year Ended December 31, 1999

     In 2000, Antarctica was consolidated for nine months. In 1999, Antarctica
was not consolidated. See "--Accounting Aspects of the Combination" and
"--Other Acquisitions and Dispositions".

     Margin Analysis

     The following table sets forth certain items in AmBev's statement of
operations expressed as percentages of net sales for the periods indicated:

                                                     Year ended December 31,
                                                       2000         1999
                                                      ------       -----

Net sales............................................ 100.0%      100.0%
Cost of sales........................................ (54.8)%     (60.6)%
Gross profit.........................................  45.2%       39.4%
Selling and marketing expenses....................... (14.6)%     (14.9)%
General and administrative expenses.................. (11.9)%     (11.3)%
Other operating expense, net.........................  (2.2)%      (2.9)%
Operating income ....................................  16.5%       10.4%

     Segment Data

     The following tables set forth, by reportable segment, selected statement
of operations data and a comparison of the changes in these items for the
periods indicated, as well as a reconciliation of the Brazilian corporation
law segment information to the corresponding U.S. GAAP line items. As noted
above, the segment data has been prepared in accordance with Brazilian
corporation law accounting principles, subject to certain exceptions. For
example, although our Brazilian corporation law financial statements
effectively consolidated Antarctica as of July 1, 1999, the segment data
included below and in our consolidated financial statements does not include
the results of Antarctica for any period prior to April 1, 2000. See
"--Presentation of Segment Financial Data". See Note 19 to AmBev's
consolidated financial statements.

     Depreciation and amortization is allocated to costs of sales and
operating income in the table set forth below and is also separately included
in the table.
<TABLE>
<CAPTION>
<S>                                                      <C>           <C>                <C>
                                                      Year ended December 31,        Percentage Change
                                                        2000           1999               2000-1999
                                                    ------------   ------------         -------------
                                                         (in thousands)

Net sales (Brazilian corporation law):(1)
  Beer............................................. US$2,206,780   US$1,516,418            45.5%
  Soft drinks......................................      410,343        212,556            93.1%
  Other............................................       58,828         60,905            (3.4)%
                                                    ------------   ------------
                                                       2,675,951      1,789,879            49.5%
                                                    ------------   ------------
  Adjustments from Brazilian corporation law to
    U.S. GAAP......................................      (40,714)       (13,936)          192.1%
                                                    ------------   ------------
       Total (U.S. GAAP)........................... US$2,635,237   US$1,775,943            48.4%
                                                    ============   ============

Cost of sales (Brazilian corporation law):(2)
  Beer............................................. US$1,115,037   US$   809,748           37.7%
  Soft drinks......................................      272,547         196,965           38.4%
  Other............................................       51,861          43,019           20.6%
                                                    ------------   -------------
                                                       1,439,445       1,049,732           37.1%
                                                    ------------   -------------
  Adjustments from Brazilian corporation law to
    U.S. GAAP......................................       (5,393)        26,544            n.a.
                                                    ------------   -------------
       Total (U.S. GAAP)........................... US$1,444,838   US$1,076,276            34.2%
                                                    ============   =============
</TABLE>


                                      50


<PAGE>

<TABLE>
<CAPTION>
<S>                                                    <C>            <C>                 <C>
                                                       Year ended December 31,         Percentage Change
                                                        2000           1999               2000-1999
                                                    ------------   ------------        ------------------
                                                         (in thousands)

Gross profit (Brazilian corporation law):

  Beer............................................. US$1,091,743   US$   706,670            54.5%
  Soft drinks......................................      137,796          15,591           783.8%
  Other............................................        6,967          17,886           (61.0)%
                                                    ------------   -------------
                                                       1,236,506         740,147            67.1%
                                                    ------------   -------------
  Adjustments from Brazilian corporation law to
     U.S. GAAP.....................................      (46,107)        (40,480)           13.8%
                                                    ------------   -------------
       Total (U.S. GAAP)........................... US$1,190,398   US$   699,667            70.1%
                                                    ============   =============

Operating income (loss) (Brazilian corporation
  law):(3)
  Beer............................................. US$   476,040  US$   253,790            87.6%
  Soft drinks......................................        21,904        (37,637)            n.a.
  Other............................................        (6,873)         4,169             n.a.
                                                    -------------  -------------
                                                          491,071        220,322           122.9%
                                                    -------------  -------------
  Adjustments from Brazilian corporation law to
    U.S. GAAP......................................      (56,268)        (36,183)           55.5%
                                                    ------------   -------------
       Total (U.S. GAAP)   ........................ US$  434,803   US$   184,139           136.1%
                                                    ============   =============

Depreciation and amortization (Brazilian
  corporation law):(4)
  Beer............................................. US$  243,449   US$   210,608            15.6%
  Soft Drinks......................................       43,213          27,906            54.9%
  Other............................................        5,548           2,862            93.9%
                                                    ------------   -------------
                                                         292,210         241,376            21.1%
                                                    ------------   -------------
  Adjustments from Brazilian corporation law to
     U.S. GAAP.....................................      (34,037)         (6,473)          425.8%
                                                    ------------   -------------
       Total (U.S. GAAP)........................... US$  258,173   US$   234,903             9.9%
                                                    ============   =============
</TABLE>

----------------------
(1)  Our U.S. GAAP net sales differed slightly from the results presented
     under Brazilian corporation law because the revenues of some affiliates,
     totaling US$39.6 million and US$36.6 million in 2000 and 1999,
     respectively, are included on a proportional consolidation basis under
     Brazilian corporation law, whereas those affiliated company revenues are
     not included in the consolidation under U.S. GAAP. This was offset by our
     having recorded in net sales US$57.6 million and US$35.8 million in 2000
     and 1999, respectively, of value-added sales tax credits under U.S. GAAP,
     whereas under Brazilian corporation law these credits are recorded
     directly into shareholders' equity. Other similar credits, which are
     recorded under Brazilian corporation law as non- operating income
     (expense), are recorded in net sales under U.S. GAAP. In addition,
     certain tax contingencies which are recorded in operating income
     (expense) under Brazilian corporation law accounting principles are
     recorded in net sales under U.S. GAAP. These tax contingency provisions
     totalled US$59.1 million and US$13.1 million in 2000 and 1999,
     respectively.

(2)  Cost of sales are similarly affected by differences in consolidation
     methodology. Additionally, cost of sales is impacted by higher
     depreciation charges under U.S. GAAP due to the fact that fair value
     adjustments, intangible assets and goodwill are recorded under U.S. GAAP
     as a result of acquisitions. Furthermore, under U.S. GAAP, shipping and
     handling costs are costs of sales, rather than selling and marketing
     expenses, as is the case under Brazilian corporation law.

(3)  Operating income under U.S. GAAP also differs in certain respects from
     our operating income under Brazilian corporation law principally due to
     differences in consolidation methodologies, pensions and benefits
     accounting and, to a lesser extent, to certain gains or losses, which are
     recorded as non-operating income (expense) under Brazilian corporation
     law, that are recorded in the appropriate statement of operations line
     item under U.S. GAAP; for example, gains or losses arising from the
     disposal of property, plant and equipment are recorded as other operating
     income (expense) under U.S. GAAP.


                                      51


<PAGE>


(4)  Depreciation and amortization under U.S. GAAP includes depreciation and
     amortization of Antarctica's additional fair value increment over
     historical cost as determined at the date of the combination.

     Net sales

     Net sales under U.S. GAAP for 2000 increased by 48.4% to US$2,635.2
million from net sales in 1999 of US$1,775.9 million. The increase was
primarily a result of the consolidation of Antarctica, but also resulted from
an increase in both beer and soft drink sales volumes and pricing. Excluding
Antarctica, AmBev's net sales increased by 23.3% to US$2,194.3 million for
2000 from net sales of US$1,775.9 million for 1999.

         Beer

     Net sales of beer under Brazilian corporation law increased by 45.5% to
US$2,206.8 million in 2000 from US$ 1,516.4 million in 1999, primarily as a
result of the consolidation of Antarctica, but also as a result of increases
in beer sales volumes and pricing. Excluding Antarctica, AmBev's net sales of
beer increased by 21.2% to US$1,839.6 million for 2000 from net sales of
US$1,516.4 million for 1999.

     Brazilian beer sales. Sales volumes of beer increased by 42.7% in 2000.
In addition to the consolidation of Antarctica, sales volumes increased due to
the growth of the beverage market resulting from the more favorable economic
environment in Brazil in 2000. Furthermore, our market share also grew. We
believe that improvements in our sales and distribution practices, including a
significant increase in direct distribution, as well as the introduction of
our proprietary beer cooling equipment for use in retail establishments
focused on-premise consumption, contributed to the increase in beer sales
volumes. However, while sales volumes of Skol and Brahma beer products
increased, sales volumes of Antarctica beer products declined from
Antarctica's 1999 sales volumes.

     Net sales per hectoliter of beer sold in Brazil by AmBev increased by
3.7% in 2000. The increase in net sales per hectoliter resulted largely from
the increase in direct distribution by us, as well as improvements in revenue
management and better execution at the points of sale. Sales by us directly to
points of sale rather than to third party distributors results in higher net
sales prices, but also in higher selling and marketing expenses. However, the
increase in selling and marketing expenses is less than the increase in sales
prices. Thus, direct distribution results in higher operating profits for us.

     International beer sales. Sales of beer in Argentina and Venezuela
represented approximately 5.7% and 5.9%, respectively, of our consolidated net
beer sales under Brazilian corporation law in 2000 and 1999.

     In Argentina, our beer sales volume increased by 12.4% in 2000, primarily
due to improved point of sale execution and direct distribution in Buenos
Aires of Brahma products. Net sales per hectoliter remained relatively stable.

     In Venezuela, our beer sales volume increased by 9.8% in 2000 as a result
of Venezuela's economic recovery from the sharp recession in 1999 and the
implementation of a direct distribution network. Net sales per hectoliter
decreased by 3.4% during 2000 due to the appreciation of the US dollar against
the bolivar.

         Soft Drinks

     Net sales of soft drinks under Brazilian corporation law increased by
93.1% to US$410.3 million in 2000 from US$212.6 million in 1999, primarily as
a result of the acquisition of Antarctica but also as a result of increases in
soft drink sales volumes and pricing. The severe price competition which
characterized the Brazilian soft drink market in 1999 eased in 2000. The
impact of the consolidation of Antarctica beginning on April 1, 2000, was more
significant in the soft drink segment than in the beer segment, because a
higher proportion of Antarctica's total sales were historically in the soft
drink


                                      52


<PAGE>


segment. Excluding Antarctica, AmBev's net sales of soft drinks increased by
23.1% to US$261.7 million for 2000 from net sales of US$212.6 million for
1999.

     Sales volumes of soft drinks increased by 78.1% in 2000. In addition to
the acquisition of Antarctica, soft drink sales volumes increased due to the
growth of the Brazilian beverage market resulting from the more favorable
economic environment in Brazil in 2000. Net sales per hectoliter of soft
drinks sold by AmBev in Brazil also increased by 8.1% in 2000. The increase in
net sales per hectoliter resulted largely from the increase in direct
distribution by us.

     Cost of Sales

     Cost of sales under U.S. GAAP increased by 34.2% from US$1,076.3 million
during 1999 to US$1,444.8 million in 2000, principally as a result of the
consolidation of Antarctica and, to a lesser extent, higher Brahma sales
volumes and increased costs of some of our principal raw materials, including
malt and aluminum cans. Excluding Antarctica, AmBev's cost of sales increased
by 13.3% to US$1,218.9 million for 2000 from cost of sales of US$1,076.3
million for 1999. However, as a percentage of our net sales, cost of sales
decreased significantly from 60.6% for the year ended December 31, 1999 to
54.8% for 2000. This decrease was primarily due to synergies from the
operational integration of Antarctica and Brahma, which resulted in
improvements in scale and efficiency at our industrial units and our
distribution systems, as well as additional cost savings by significantly
reducing fixed costs, including by the closure of less cost-efficient plants.
Beginning in April 2000, AmBev closed three soft drink plants and
redistributed production among the remaining Brahma and Antarctica plants to
more efficiently match logistical and distribution requirements. AmBev also
transferred best practices from Brahma plants to Antarctica plants and
implemented strict operating procedures and quality control measures to
improve productivity in the Antarctica plants. At the same time, AmBev began
to distribute all of its products through the same distributors.

         Beer

     Cost of sales for beer under Brazilian corporation law increased by 37.7%
from US$809.7 million during 1999 to US$1,115.0 million in 2000. However, as a
percentage of our net sales of beer, cost of beer sales decreased
significantly from 53.4% for the year ended December 31, 1999 to 50.5% for the
year ended December 31, 2000. Our cost of sales per hectoliter of beer sold
also declined.

     The increase in cost of sales resulted primarily from the consolidation
of Antarctica and, to a lesser extent, from the additional increase in Brahma
and Skol sales volumes. Higher cost of sales also resulted from an increase in
the cost of malt and aluminum cans. Aluminum cans and malt costs increased
primarily because the price of aluminum and malt is indexed to dollars. Thus,
the devaluation of the real in 2000 resulted in higher costs of those raw
materials to us. In addition, sales of beer in non-returnable packaging, i.e.,
aluminum cans increased to 25% in 2000 from 23% in 1999. Aluminum cans result
in higher cost of sales than returnable bottles. We are able to sell beer in
aluminum cans at a higher price per hectoliter than beer sold in returnable
bottles. However, the higher selling price is more than offset by the
increased cost of sales. Thus, the sale of beer in aluminum cans results in
lower gross profit margins for us. See "Item 4--Information on the
Company--AmBev's Business Overview--Distribution and Sales--Advertising and
Promotional Activity--Product Presentations.

     The decrease in the percentage of our net beer sales represented by the
cost of sales, as well as the decrease in the cost of sales per hectoliter of
beer sold, resulted from the manufacturing, logistics and distribution
efficiencies realized from the integration of Brahma's and Antarctica's
operations described above.


                                      53


<PAGE>


         Soft Drinks

     Cost of sales for soft drinks under Brazilian corporation law increased
by 38.4% from US$197.0 million during 1999 to US$272.5 million in 2000.
However, as a percentage of our net sales of soft drinks, costs of soft drink
sales decreased significantly from 92.7% for the year ended December 31, 1999
to 66.4% for the year ended December 31, 2000. Our cost of sales per
hectoliter of soft drinks sold also declined. The increase in cost of sales
resulted primarily from the consolidation of Antarctica and, to a lesser
extent, from the additional increase in sales volumes.

     The decrease in the percentage of our net soft drink sales represented by
the cost of sales, as well as the decrease in the cost of sales per hectoliter
of soft drinks sold, resulted from the manufacturing, logistics and
distribution efficiencies realized from the integration of Brahma's and
Antarctica's operations described above, including the elimination during the
second half of 2000 of a number of soft drink brands and packaging formats, as
well as the closing of three soft drink plants.

     Gross Profit

     Gross profit under U.S. GAAP in 2000 of U.S. 1,190.4 million increased by
70.1% over gross profit in 1999 of US$699.7 million. The increase in gross
profit resulted from the consolidation of Antarctica, the significant decline
in costs of sales per hectoliter of beer and soft drinks sold, the additional
volume growth of beer and soft drinks and the increase in pricing resulting
from the increase in direct distribution. Our gross margins increased from
39.4% in 1999 to 45.2% in 2000. Our gross margins increased as a result of the
reduction of our cost of sales per hectoliter and the increase in direct
distribution, as well as improvements in revenue management and better
execution at the points of sale.

     Excluding Antarctica, AmBev's gross profit increased by 39.4% to US$975.4
million for 2000 from US$699.7 million for 1999.

     Selling and Marketing Expenses

     Selling and marketing expenses under U.S. GAAP increased by 45.7% from
US$263.8 million during 1999 to US$384.4 million for 2000 primarily as a
result of the consolidation of Antarctica, but also as a result of the
implementation of direct distribution at Antarctica in 2000 and an increase in
direct distribution by Brahma. Although direct distribution results in higher
net sales since we sell directly to the retailer, rather than to a third party
distributor who would sell to the retailer, direct distribution also results
in higher expenses for us (which we treat as selling expenses rather than cost
of sales). Shipping and handling costs related to direct sales are included in
cost of sales under US GAAP. Direct distribution expenses include product
delivery charges and the cost of sales and delivery personnel required to
distribute our products. In addition to the recurring direct distribution
expenses, a portion of our selling and marketing expenses in 2000 related to
the expansion of our direct distribution network. See "Item 4--Information on
the Company--AmBev's Business Overview--Distribution and Sales--Distribution".
We expect these costs to continue as we expand our direct distribution
network. Distribution related-costs represented 9.9% of our total selling and
marketing expenses in 2000 as compared to 12.4% in 1999.

     Selling and marketing expenses decreased as a percentage of net sales
from 14.9% in 1999 to 14.6% in 2000 due in part to the integration of the
selling and marketing departments of Antarctica and Brahma in 2000. In
addition, advertising expenses in 2000 increased to US$150.8 million from
US$121.4 million in 1999.

     Excluding Antarctica, AmBev's selling and marketing expenses increased by
1.6% to US$267.9 million for 2000 from US$263.8 million in 1999.


                                      54


<PAGE>


     General and Administrative Expenses

     General and administrative expenses under U.S. GAAP increased by 56.3%
from US$200.3 million in 1999 to US$313.1 million in 2000. The increase was
principally due to the consolidation of Antarctica and to an increase in
depreciation and amortization expense from US$21.3 million in 1999 to US$91.1
million during 2000. The provision for profit sharing also increased by US$8.0
million in 2000. Excluding Antarctica, AmBev's general and administrative
expenses increased by 29.3% to US$259.1 million for 2000 from US$200.3 million
for 1999.

     Other Operating Income (Expense), Net

     Other operating income (expense), net , under U.S. GAAP increased from an
expense of US$51.3 million in 1999 to an expense of US$72.6 million for 2000
in part as a result of the consolidation of Antarctica. Excluding Antarctica,
AmBev's other operating expenses, net, remained stable at US$58.2 million for
2000 from US$51.3 million for 1999. Principal expenses for 2000 include:

     o  US$9.1 million for the interest and penalties portion of ICMS
        value-added tax and IPI excise tax contingent credits, compared to a
        US$19.1 million in 1999;

     o  an impairment loss of US$20.9 million on some of our fixed assets,
        compared to 17.3 million in 1999;

     o  a valuation allowance of US$8.7 million relating to prepaid water
        costs; and

     o  US$29.0 million of provisions made for various civil claims from
        suppliers and others, compared to provisions of US$21.2 million in
        1999.

     Those expenses were partially offset by income of US$5.5 million relating
the gain of the sale of Bavaria S.A., compared to a gain on sale of other
assets of US$5.3 million in 1999. Additionally in 2000, income of US$8.4
million was recorded due to the reversal of ICMS provisions in 1999 for which
we obtained a favorable judicial ruling.

     Operating Income

     Operating income under U.S. GAAP increased by 136.1% from US$184.1
million in 1999 to US$434.8 million in 2000. Operating income as a percentage
of net sales increased to 16.5% in 2000 from 10.4% in 1999. Operating income
increased as a result of the increase in gross profit and operating margins
described above.

     Financial Income and Expenses

     Our financial income includes not only interest income, but also foreign
exchange gains and gains on derivatives, including foreign currency swaps and
forward contracts. Our financial expenses include not only interest charges on
debt, but also foreign exchange losses, principally on debt, and losses on
derivatives, including foreign currency swaps and forward contracts.

     Our net financial expense under US GAAP increased to US$145.9 million in
2000 from US$77.4 million in 1999, principally as a result of lower gains on
foreign currency and interest rate swap activities.

         Financial Income

     Financial income under U.S. GAAP decreased by 55.0% from US$364.8 million
in 1999 to US$164.3 million in 2000. This decrease was principally due to a
decline in the gain on foreign currency and interest rate swaps, from US$180.4
million in 1999 to US$18.9 million in 2000. We enter into foreign currency
swaps and forward contracts to mitigate the foreign-currency risk of our U.S.
dollar- denominated liabilities. The significant devaluation of real in
January 1999 resulted in a gain of


                                      55


<PAGE>


US$180.4 million on those instruments in 1999. However, in 2000 the value of
the real largely stabilized, resulting in the reduction of the gain on foreign
currency and interest rate swaps to US$18.9 million. The stabilization of the
real in the first nine months of 2000 also resulted in a decline in other
foreign exchange gain from US$35.5 million in 1999 to US$27.3 million in 2000.
In addition, interest income on cash equivalents declined from US$93.0 million
in 1999 to US$76.7 million in 2000. The decline resulted principally from
lower levels of cash equivalents available during 2000 due to our use of cash
to repay Antarctica's debt.

         Financial Expenses

     Financial expenses under U.S. GAAP decreased by 29.9% from US$442.2
million in 1999 to US$310.2 million in 2000. The significant devaluation of
the real in January 1999 resulted in foreign exchange losses principally on
loans of US$189.5 million in 1999. However, the stabilization of the real in
the first nine months of 2000 resulted in a reduction of foreign exchange
losses to US$64.5 million. Similarly, losses on foreign currency and interest
rate swap activities declined from US$61.7 million in 1999 to US$26.6 million
in 2000. The decrease in foreign exchange losses and losses on foreign
currency and interest rate swap activities was offset in part by an increase
in charges on Brazilian real debt and banking charges and other due to the
consolidation of Antarctica in 2000. Charges on Brazilian real debt increased
from US$76.4 million in 1999 to US$87.2 million in 2000. Tax on financial
transactions increased from US$13.0 million in 1999 to US$33.8 million in
2000.

     Other Non-Operating (Expense) Income, Net

     Other non-operating (expense) income, net under U.S. GAAP decreased from
an expense of US$8.4 million in 1999 to an expense of US$0.9 million in 2000
due primarily to a decrease in the provision for losses in excess of
investments of US$4.9 million during 2000 compared to an expense of US$8.5
million during 1999. The decrease in the provision is principally due to our
investee Pilcomayo Participacoes Ltda. having net income of US$10.0 million in
2000, compared to a net loss of US$11.4 million in 1999.

     Income Tax Benefit

     Income tax benefit under U.S. GAAP increased from US$41.4 million in 1999
to US$387.2 million in 2000. In Brazil, the composite statutory tax rate on
income in 2000 and 1999 was unchanged at 33%. Our effective tax rate on pretax
income was a benefit of 134.5% in 2000 and 42.1% in 1999. The major reasons
for the differences between the effective rates in relation to the statutory
rates were a number of one-time items, including:

     o  the release in 2000 of valuation allowances against net operating loss
        tax assets totaling US$253.1 million, including past period losses and
        timing differences of US$209.1 million which arose in Antarctica and
        which had been fully provided for by us at the date of acquisition.
        The release of the valuation allowances was made possible following a
        corporate restructuring of certain of our Brazilian subsidiaries, the
        result of which is that we are now confident that the utilization of
        these losses is more likely than not;

     o  tax planning measures in 2000 that allowed AmBev to reverse deferred
        tax liabilities on equity in earnings of offshore investment companies
        of US$146.2 million; and

     o  a tax asset of US$41.1 million resulting from a non-deductible medical
        plan liability recognized by AmBev following the combination.

In addition, we recognized a tax benefit of US$33.4 million in 2000 from
having paid tax-deductible interest attributable to shareholders' equity, a
form of dividend distribution, which does not affect our net income except for
the tax benefit, which was similar to the tax benefit of US$32.4 million
recognized in 1999.


                                      56


<PAGE>



     Equity in Earnings of Affiliates

     Equity in earnings of affiliates under U.S. GAAP increased from US$5.4
million for 1999 to US$11.7 million for 2000. This increase was principally
due to increased earnings in our affiliate Cevejaria Astra, which had net
income in 2000 of US$35.0 million in comparison to a net income of US$11.4
million in 1999.

     Equity in Losses of Antarctica

     Equity in losses of Antarctica under U.S. GAAP decreased from US$179.1
million for 1999 to US$49.9 million for 2000. Antarctica's results of
operations were consolidated on a line-by-line basis beginning on April 1,
2000. Thus, equity in losses of Antarctica for 2000 include only three months
of Antarctica's results in comparison to six months for 1999.

     Net Income (loss)

     Net income under U.S. GAAP was a loss of US$30.6 million in 1999 against
net income of US$622.8 million in 2000. Net income in 2000 arose as a result
of the increase in our gross profit, the one-time increase in income tax
benefit and the reduction in equity in losses of Antarctica, which were partly
offset by an increase in our net financial expenses. You should be aware,
however, that the continuing devaluation of the real, energy shortages in
Brazil and slowing economic growth in Brazil may have an adverse effect on our
results in 2001. See "Item 3--Key Information--Risk Factors--Factors Relating
to Brazil--Electric power shortages currently faced by Brazil could adversely
affect us", "Item 3--Key Information--Exchange Rate Information--Devaluation
of the Real" and "Item 4--Information on the Company--AmBev's Business
Overview--Property, Plant and Equipment".

Year Ended December 31, 1999 Compared with Year Ended December 31, 1998

     Margin Analysis

     The following table sets forth certain items in AmBev's statement of
operations expressed as percentages of net sales for the periods indicated:

                                             Year ended December 31,

                                               1999         1998
                                              ------       ------

Net sales.................................... 100.0%      100.0%
Cost of sales................................ (60.6)%     (60.3)%
Gross profit.................................  39.4%       39.7%
Selling and marketing expenses............... (14.9)%     (21.5)%
General and administrative expenses.......... (11.3)%     (10.5)%
Other operating income (expense), net........  (2.9)%       0.1%
Operating income.............................  10.4%        7.8%

     Constant Currency and Segment Data

     The following table sets forth, by reportable segment, selected statement
of operations data and a comparison of the changes in these items for the
periods indicated, as well as a reconciliation of the Brazilian corporation
law segment information to the corresponding U.S. GAAP line items. As noted,
the segment data has been prepared in accordance with Brazilian corporation
law accounting principles, subject to certain exceptions. For example,
although our Brazilian corporation law financial statements effectively
consolidated Antarctica as of July 1, 1999, the segment data included below
and in our consolidated financial statements does not include the results of
Antarctica for any period prior to April 1, 2000. See "--Presentation of
Segment Financial Data". See Note 19 to AmBev's consolidated financial
statements.


                                      57


<PAGE>


     The significant devaluation of the real in 1999 adversely affects the
comparability of 1999 results with 1998 results. In order to mitigate in part
the effect of the devaluation in comparing the results of 1999 to 1998, the
following segment and other financial information for the years ended December
31, 1999 and 1998 have been presented to show:

     o  the historical data for each period; and

     o  the 1998 data based on 1999 exchange rates (the constant exchange rate
        data).

     The constant exchange rate data presents the underlying balances in reais
for the year ended December 31, 1998 translated into U.S. dollars at the
average exchange rate for the year ended December 31, 1999.

     Depreciation and amortization is allocated to cost of sales and operating
income in the table set forth below and is also separately included in the
table.
<TABLE>
<CAPTION>
<S>                                          <C>             <C>              <C>                <C>             <C>
                                                  Year ended December 31,                          Percentage Change
                                    ---------------------------------------------------       ---------------------------
                                                                               1998                          1999-1998
                                                                              Constant                        Constant
                                          1999             1998               Exchange          1999-1998     Exchange
                                         Actual            Actual               Rate             Actual         Rate
                                      -------------   -------------     --------------         -----------  ------------
                                                       (in thousands)
Net sales (Brazilian corporation
  law): (1)
    Beer...........................      US$1,516,418      US$2,187,505      US$1,398,832       (30.7)%         8.4%
    Soft drinks....................           212,556           454,869           290,873       (53.3)%       (26.9)%
    Other..........................            60,905            76,863            49,151       (20.8)%        23.9%
                                        -------------     -------------     -------------
                                            1,789,879         2,719,237         1,738,856       (34.2)%         2.9%
                                        -------------     -------------     -------------
    Adjustments from Brazilian
      Corporation Law to U.S.
      GAAP.........................           (13,936)          (49,899)          (31,909)
                                        -------------     -------------     --------------
        Total (U.S. GAAP)..........      US$1,775,943      US$2,669,338      US$1,706,947       (33.5)%         4.0%
                                        =============     =============     =============

Cost of sales (Brazilian
  corporation law):(2)
    Beer...........................     US$   809,748      US$1,142,489     US$   730,581       (29.1)%        10.8%
    Soft drinks....................           196,965           365,275           233,580       (46.1)%       (15.7)%
    Other..........................            43,019            43,056            27,533        (0.1)%        56.2%
                                        -------------     -------------     -------------
                                            1,049,732         1,550,820           991,694       (32.3)%         5.9%

Adjustments from Brazilian
  corporation law to U.S. GAAP.....            26,544            57,520            36,782
                                        -------------     -------------     -------------
        Total (U.S. GAAP)..........      US$1,076,276      US$1,608,340      US$1,028,476       (33.1)%         4.6%
                                        =============     =============     =============
</TABLE>


                                      58


<PAGE>


<TABLE>
<CAPTION>
<S>                                          <C>             <C>              <C>                <C>             <C>
                                                  Year ended December 31,                          Percentage Change
                                    ---------------------------------------------------       ---------------------------
                                                                               1998                          1999-1998
                                                                              Constant                        Constant
                                          1999             1998               Exchange          1999-1998     Exchange
                                         Actual            Actual               Rate             Actual         Rate
                                      -------------   -------------     --------------         -----------  ------------
                                                       (in thousands)

Gross profit (Brazilian corporation law):

      Beer.........................     US$   706,670      US$1,045,016     US$   668,251       (32.4)%        5.7%
      Soft drinks..................            15,591            89,594            57,293       (82.6)%      (72.8)%
      Other........................            17,886            33,807            21,618       (47.1)%      (17.3)%
                                        -------------     -------------     -------------
                                              740,147         1,168,417           747,162       (36.7)%       (0.9)%
                                        -------------     -------------     -------------
    Adjustments from Brazilian
      corporation law to U.S.
      GAAP.........................           (40,480)         (107,419)          (68,691)
                                        -------------     -------------     -------------
        Total (U.S. GAAP)..........     US$   699,667      US$1,060,998     US$   678,471       (34.1)%        3.1%
                                        =============     =============     =============

Operating income (loss)
  (Brazilian corporation law):(3)
    Beer...........................     US$   253,790     US$   410,216     US$   262,319       (38.1)%       (3.3)%
    Soft drinks....................           (37,637)          (33,878)          (21,664)       11.1%        73.7%
    Other..........................             4,169            13,183             8,430       (68.4)%      (50.5)%
                                        -------------     -------------     -------------
                                              220,322           389,521           249,085       (43.4)%      (11.5)%
                                        -------------     -------------     -------------
    Adjustments from Brazilian
      corporation law to U.S.
      GAAP.........................           (36,183)         (180,132)         (115,188)
                                        -------------     -------------     -------------
        Total (U.S. GAAP)..........     US$   184,139     US$   209,389     US$   133,897       (12.1)%       37.5%
                                        =============     =============     =============

U.S. GAAP:

Financial income...................     US$   364,829     US$   198,636     US$   127,021       83.7%        187.2%
Financial expenses.................          (442,245)         (289,504)         (185,128)      52.8%        138.9%
Other non-operating income
  (expense), net...................            (8,448)                              9,588        n.a           n.a
Income tax benefit.................            41,388            92,696            59,276      (55.4)%       (30.2)%
Equity in earnings of affiliates...             5,404             2,962             1,894       82.4%        185.3%
Equity in (loss) Antarctica........          (179,116)                -                 -
Minority interest..................             3,498             9,404             6,014      (62.8)%       (41.8)%
                                        -------------     -------------     -------------
Net income (loss)..................     US$   (30,551)    US$   238,577     US$   152,562     (112.8)%         n.a.
                                        =============     =============     =============

Depreciation and amortization:

    Beer...........................     US$   210,608     US$   228,356     US$   146,026       (7.8)%        44.2%
    Soft Drinks....................            27,906            51,020            32,625      (45.3)%       (14.5)%
    Other..........................             2,862             5,658             3,618      (49.4)%       (20.9)%
                                        -------------     -------------     -------------
                                              241,376           285,034           182,269      (15.3)%        32.4%
                                        -------------     -------------     -------------
    Adjustments from Brazilian
      corporation law to U.S.
      GAAP.........................            (6,473)          (21,680)          (13,864)
                                        -------------     -------------     -------------
        Total (U.S. GAAP)..........     US$   234,903     US$   263,354     US$   168,405      (10.8)%        39.5%
                                        =============     =============     =============
</TABLE>

--------------
(1)  Our U.S. GAAP net sales differed slightly from the results presented
     under Brazilian corporation law because the revenues of some affiliates,
     totaling US$36.6 million and US$ 49.9 million in 1999 and 1998,
     respectively, are included on a proportional consolidation basis under
     Brazilian corporation law, whereas those affiliated company revenues are
     not included in the consolidation under U.S. GAAP. This was offset by our
     having recorded in net sales US$35.8 million in 1999 of value-added sales
     tax credits under U.S. GAAP, whereas under Brazilian corporation law
     these credits are recorded directly into shareholders' equity. Other
     similar credits, which are recorded under Brazilian corporation law as
     non-operating income (expense), are recorded in net sales


                                      59


<PAGE>


     under U.S. GAAP. In addition, certain tax contingencies which are
     recorded in operating income (expense) under Brazilian corporation law
     accounting principles are recorded in net sales under U.S. GAAP. These
     tax contingency provisions totalled US$13.1 million in 1999.

(2)  Cost of sales are similarly affected by differences in consolidation
     methodology. Additionally, cost of sales is impacted by higher
     depreciation charges under U.S. GAAP due to the fact that fair value
     adjustments, intangible assets and goodwill are recorded under U.S. GAAP
     as a result of acquisitions. Furthermore, under U.S. GAAP, shipping and
     handling costs are costs of sales, rather than selling and marketing
     expenses, as is the case under Brazilian corporation law.

(3)  Operating income under U.S. GAAP also differs in certain respects from
     our operating income under Brazilian corporation law principally due to
     differences in consolidation methodologies, pensions and benefits
     accounting and, to a lesser extent, to certain gains or losses, which are
     recorded as non-operating income (expense) under Brazilian corporation
     law, that are recorded in the appropriate statement of operations line
     item under U.S. GAAP; for example, gains or losses arising from the
     disposal of property, plant and equipment are recorded as other operating
     income (expense) under U.S. GAAP.

     The discussion comparing 1999 results to 1998 results which follows is
based on the constant exchange rate data, which we believe will assist you in
analyzing the trends underlying our results, other than those resulting from
the significant devaluation of the Brazilian real in 1999.

     Net sales

     Net sales under U.S. GAAP in 1999 increased by 4.0% to US$1,775.9 million
over net sales in 1998 of US$1,706.9 million. This increase was due to an
average increase of our products' prices per hectoliter of 8.8% during the
year, which was partially offset by a decrease of 5.4% of volume sold in 1999,
resulting from lower soft drink sales volumes.

         Beer

     Net sales of beer under Brazilian corporation law increased by 8.4% from
US$1,398.8 million in 1998 to US$1,516.4 million in 1999. The increase was
primarily a result of an increase in direct distribution by us in Brazil,
improved points of sale execution and an increase in our beer sales in
Argentina.

     Brazilian beer sales. Sales volumes of beer increased by 1.9% in 1999.
Net sales per hectoliter of beer sold in Brazil by AmBev increased by 3.8% in
1999. The increase in net sales per hectoliter resulted largely from the
increase in direct distribution by us.

     International beer sales. Sales of beer in Argentina and Venezuela
represented approximately 8.0% and 5.8%, respectively, of our consolidated net
beer sales under Brazilian corporation law in 1999 and 1998.

     In Argentina, our beer sales volume increased by 20.2% in 1999, primarily
due to improved point of sale execution and direct distribution in Buenos
Aires.

     In Venezuela, our beer sales volume decreased by 30.8% in 1999 as a
result of Venezuela's sharp recession. Net sales per hectoliter increased by
77.2% during 1999 due to the appreciation of the US dollar against the
bolivar.

         Soft Drinks

     Net sales of soft drinks under Brazilian corporation law decreased by
26.9% from US$290.9 million in 1998 to US$212.6 million in 1999. This decrease
was primarily due to increased competition which resulted in substantially
lower volumes. We decided not to lower our prices to match price reductions by
our competitors. As a result, sales volumes during 1999 declined by 29.9%.


                                      60


<PAGE>


     Cost of Sales

     Cost of sales under U.S. GAAP in 1999 increased by 4.6% to US$1,076.3
million over cost of sales for 1998 of US$1,028.5 million. The increase was
due to an increase in beer volumes and other factors.

     Beer. Cost of sales for beer under Brazilian corporation law increased by
10.8% from US$730.6 million in 1998 to US$809.7 million in 1999. The increase
was due to an increase in volumes as well as an increase in our depreciation
charges at the Jacarei and Novo Rio plants due to an acceleration of the
effective rates of depreciation at those plants. These increases were
partially offset by greater efficiency in the production process resulting
from the modernization of our production facilities which resulted in lower
overhead and labor costs per hectoliter.

     Soft Drinks. Cost of sales for soft drinks under Brazilian corporation
law decreased by 15.7% from US$233.6 million in 1998 to US$197.0 in 1999. The
decrease was due to the decrease in sales volume of soft drinks of 29.9%.

     Gross Profit

     Gross profit under U.S. GAAP in 1999 of US$699.7 million increased by
3.1% over gross profit in 1998 of US$678.5 million as a result of the increase
in net sales of beer. Gross margins decreased slightly from 39.7% in 1998 to
39.4% in 1999 due to the decline in soft drink margins.

     Beer. Gross profit under Brazilian corporation law increased by 5.7% from
US$668.3 million in 1998 to US$706.7 million in 1999 as a result of the
increase in net sales. Gross margins increased by 2.5% from 47.8% in 1998 to
46.6% in 1999.

     Soft Drinks. Gross profit under Brazilian corporation law decreased by
72.8% from US$57.3 million in 1998 to US$15.6 million in 1999. The decrease in
gross profit was due to sales volume reductions reflecting increasing
competition in the Brazilian soft drink market. Gross margins decreased by
62.9% from 19.7% in 1998 to 7.3% in 1999.

     Selling and Marketing Expenses

     Selling and marketing expenses under U.S. GAAP decreased by 28.1% from
US$366.9 million in 1998 to US$263.8 million in 1999. This decrease primarily
reflects lower advertising costs, which had been significantly higher in 1998
due to the World Cup soccer games, and additional investments in market
research made during the past three years, which resulted in a more efficient
use of our marketing expenditures in 1999. Advertising costs declined from
US$244.3 million in 1998 to US$121.4 million in 1999. The decrease in
advertising expenses was partly offset by increases in expenses relating to
the increase in direct distribution by us. In addition to the recurring direct
distribution expenses, a portion of our selling and marketing expenses in 1998
and 1999 were expenses relating to the expansion of Brahma's direct
distribution network. We expect these costs to continue as we expand our
direct distribution network. See "Item 4--Information on the Company--AmBev's
Business Overview--Distribution and Sales--Distribution". Distribution-related
costs represented 12.4% of our total selling and marketing expenses in 1999
compared to 15.2% in 1998.

     General and Administrative Expenses

     General and administrative expenses under U.S. GAAP increased by 11.3%
from US$179.9 million in 1998 to US$200.3 million in 1999. The increase in
1999 was primarily due to provisions for profit- sharing to be paid at
year-end, increases in administrative depreciation and amortization expenses
for new plants and direct distribution investments and general expenses
incurred by AmBev in connection with the combination with Antarctica.


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<PAGE>



     Other Operating Income (Expense), Net

     Other operating income (expense), net under U.S. GAAP decreased from net
income of US$2.2 million in 1998 to a net expense of US$51.3 million in 1999.
This change was primarily due to the following provisions made in 1999:

     o  US$19.2 million for the interest and penalties portion of ICMS and IPI
        tax contingent credits;

     o  an impairment loss of US$17.3 million on some of our fixed assets;

     o  US$5.7 million involving an assessment against one of our subsidiaries
        for not providing adequate ICMS documentation on magnetic disk as
        required by a tax law enacted in 1999;

     o  US$6.9 million relating to over 100 different claims in respect of the
        payment of ICMS and ICMS substitute; and

     o  US$21.2 million of provisions made for various claims from
        distributors, suppliers and others.

     These expenses were partly offset by income of US$8.4 million related to
the reversal of ICMS provisions for which we obtained a favorable judicial
ruling, and a gain of US$5.3 million on the sale of property, plant and
equipment. In 1998, other operating income consisted of a gain on the sale of
fixed assets, which was offset in part by various other operating expenses.

     Operating Income

     Operating income under U.S. GAAP increased by 37.5% from US$133.9 million
in 1998 to US$184.1 million in 1999, due to the increase in net sales of beer
and the reduction in selling and marketing expenses, which were partly offset
by increases in general and administrative expenses and other operating
expenses. Operating income as a percentage of net sales increased to 10.4% in
1999 from 7.8% in 1998 as a result of the decline in selling and marketing
expenses.

     Beer. Operating income under Brazilian corporation law decreased by 3.3%
to US$253.8 million in 1999 from US$262.3 million in 1998 due to an increase
in costs as a result of the devaluation. Operating margins decreased from
18.7% in 1998 to 16.7% in 1999.

     Soft Drinks. Operating losses under Brazilian corporation law increased
to US$37.6 million in 1999 from US$21.7 million in 1998 due to a sharp
decrease in sales volumes.

     Financial Income and Expenses

     Our net financial expenses increased to US$77.4 million in 1999 from
US$58.1 million in 1998, primarily as a result of the increase in foreign
exchange losses principally on loans, which was largely offset by gains on
foreign currency swaps and forward contracts.

         Financial Income

     Financial income under U.S. GAAP increased by 187.2% from US$127.0
million in 1998 to US$364.8 million in 1999, primarily as a result of gains on
foreign currency swaps and forward contracts. In 1999, gains on foreign
currency and interest rate swap activities increased to US$180.4 million from
US$2.9 million in 1998. Beginning in September 1998, in order to minimize what
we perceived to be the growing risk of a devaluation of the real, we began
entering into foreign currency swaps and forward contracts and increased the
transfer of our cash equivalents from real- denominated instruments to
dollar-denominated instruments.


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<PAGE>


         Financial Expenses

     Financial expenses under U.S. GAAP increased by 138.9% from US$185.1
million in 1998 to US$442.2 million in 1999. This change was principally a
result of the effect of the devaluation of real on our dollar-denominated
financial liabilities and consisted of the following:

     Foreign exchange losses on loans. The devaluation of the real resulted in
foreign exchange losses principally on loans of US$189.5 million in 1999, an
increase of US$155.8 million from the 1998 charge of US$33.7 million.

     Interest on Brazilian real debt. Interest expense on real debt increased
by 44.5% to US$76.4 million from the 1998 total of US$52.9 million. Interest
expense on real-denominated loans increased primarily as a result of higher
interest rates. While market interest rates on Brazilian debt increased in
1998 and 1999 as a result of the Asian and Russian financial crises and the
devaluation of the real, we did not experience as sharp an increase in
financial costs measured in reais because a major portion of our interest
bearing debt is payable to the Brazilian Economic and Social Development Bank
(BNDES), based on the Long-term Interest Rate - TJLP, adjusted quarterly,
which decreased from 18.1% at December 31, 1998 to 12.5% at December 31, 1999.
See "--Liquidity and Capital Resources".

     Interest on U.S. dollar debt. Interest expense on U.S. dollar-denominated
debt increased by 48.0% to US$61.4 million from the 1998 total of US$41.5
million, primarily as a result of devaluation of the real.

     Losses on foreign currency swaps, interest rate swaps and forward
contracts. As a result of our entering into significantly increased amounts of
foreign currency swaps and forward contracts beginning in the fourth quarter
of 1998, we realized financial expenses of US$61.7 million in 1998.

     Other Non-Operating Income (Expense), Net

     Other non-operating income (expense), net under U.S. GAAP decreased from
income of US$9.6 million in 1998 to an expense of US$8.4 million in 1999. This
decrease was primarily due to provisions made to reflect our share in the net
liabilities of our affiliates, Cervejaria Miranda Correa S.A., Miller Brewing
do Brasil Ltda. and Pilcomayo Participacoes Ltda. In the case of these
affiliates, we have an agreement with the principal creditors of the investee,
pursuant to which we have assumed our portion of the amount of its liabilities
that exceeds its assets. These liabilities are primarily financing
arrangements covered by our guarantees.

     Income Tax Benefit

     Income tax benefit under U.S. GAAP decreased by 30.2% from US$59.3
million in 1998 to US$41.4 million in 1999.

     In Brazil, the composite statutory tax rate on income in 1999 and 1998
was 33%. Our effective tax rate on pretax income was a benefit of 42.1% in
1999 and 69.4% in 1998. The major reasons for the differences between the
effective rates in relation to the statutory rates have been the reversal of
tax contingency provisions and foreign tax provisions, benefits arising from
payments of interest on shareholders' equity (a form of tax deductible
dividend) and, in 1999, the refiling of our 1993 tax return following changes
in the interpretation of certain deductions. The contingencies relate to
non-asserted potential income tax liabilities which were eliminated upon the
expiration of the applicable statute of limitations.

     Equity in Earnings of Affiliates

     Equity in earnings of affiliates under U.S. GAAP increased from US$1.9
million in 1998 to US$5.4 million in 1999, mainly due to increased earnings
from our affiliate Cervejaria Astra S.A. In 1999, we suspended the application
of the equity method to our affiliate Cervejaria Miranda Correa S.A., as we
also did in 1998 with our affiliates Miller Brewing do Brasil Ltda. and
Pilcomayo Participacoes Ltda., as


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<PAGE>


a result of our share of the liabilities of those affiliates exceeding their
assets. We have agreements to honor those affiliates' commitments with third
parties. Therefore, at December 31, 1999, a total balance sheet provision of
US$23.6 million exists to reflect our obligations.

     Equity in Loss of Antarctica

     Equity in loss of Antarctica under U.S. GAAP represents the loss
generated by Antarctica from July 1, 1999 to December 31, 1999, in the amount
of US$179.1 million, as well as the effect of depreciation and amortization of
acquired tangible and intangible assets of US$5.6 million and the related
income tax benefit of US$1.8 million.

     Antarctica's results in 1999 were characterized by continuing declines in
sales volumes of both beer and soft drinks, resulting from stagnant demand for
Antarctica's beer products and lower soft drink sales volumes due to the
aggressive competition in the Brazilian soft drink market. As a consequence,
Antarctica had an operating loss of US$117.6 million in 1999. In addition, its
deteriorating operating results led to high debt levels, resulting in net
financial expenses of US$318.1 million in 1999. Financial expenses included
US$216.8 million of foreign exchange losses on loans due to the devaluation of
the real. A significant portion of Antarctica's debt was denominated in
dollars. As a result of Antarctica's operating losses and financial expenses,
Antarctica had a net loss in 1999 of US$440.9 million.

     Net Income (Loss)

     Net income under U.S. GAAP in 1998 of US$152.5 million declined to a loss
of US$30.6 million in 1999. The reduction in net income resulted from the
equity in losses of Antarctica.


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<PAGE>



                        LIQUIDITY AND CAPITAL RESOURCES

     Our primary sources of liquidity have historically been cash flows from
operating activities and borrowings. Our material cash requirements have
included the following:

     o  investments in companies participating in the brewing, soft drink and
        malting industries;

     o  our share buy-back program;

     o  capital expenditures;

     o  increases in ownership of our subsidiaries or companies in which we
        have equity investments;

     o  payments of dividends and interest attributable to shareholders'
        equity; and

     o  the servicing of our indebtedness.

     AmBev's cash and cash equivalents and trading securities (which consist
of short-term marketable securities) at December 31, 2000, 1999 and 1998 were
US$513.5 million (excluding Zerrenner Foundation restricted cash) US$929.4
million and US$880.8 million, respectively. The decline in the amount of our
cash and cash equivalents and trading securities at the end of 2000 compared
to the end of 1999 was due to our repaying a significant portion of
Antarctica's outstanding debt during 2000.

     We believe that cash flows from operating activities, along with
borrowings, available cash and cash equivalents and trading securities, will
be sufficient to fund all of our anticipated cash requirements in 2001,
including capital expenditures, debt service and dividends.

Cash Flows

     Operating Activities

     AmBev's cash flows from operating activities totaled US$514.8 million in
2000, US$621.0 million in 1999 and US$477.0 million in 1998. The decrease in
cash generated in 2000 resulted from a decrease in cash provided by operating
activities, excluding the effect of adjusting for changes in operating assets
and liabilities, from US$663.3 million in 1999 to US$548.1 million in 2000.
The increase in cash generated in 1999 resulted from a decrease in 1998 in
operating liabilities of US$141.2 million in comparison to an increase in
operating liabilities in 1999 of US$63.3 million.

     Investing Activities

     Cash flows used in AmBev's investing activities were US$53.8 million in
2000, US$76.6 million in 1999 and US$214.6 million in 1998. Cash flows used in
investing activities declined in 1999 and in 2000 as a result of lower levels
of capital investments in property, plant and equipment. Beginning in 1994 and
concluding in 1998, AmBev pursued an aggressive investment program to
modernize and expand its production facilities. See "--Capital Investment
Program". In 2000, AmBev invested US$145.7 million in property, plant and
equipment. Total investing activity expenditures were reduced in large part by
the receipt of proceeds of US$110.4 million in connection with the disposal of
assets, principally relating to the sale of Bavaria S.A. In 1999, AmBev
invested US$108.5 million in property, plant and equipment. Proceeds received
on the disposal of assets totaled only US$21.9 million. In 1998, AmBev
invested US$252.6 million in property, plant and equipment and acquired an
additional interest in Maltaria Pampa S.A. for a net expenditure of US$48.4
million. Total investing activity expenditures were reduced in part by the
receipt of proceeds totaling US$83.9 million in connection with the disposal
of assets.


                                      65


<PAGE>


     Financing Activities

     Cash flows used in AmBev's financing activities were US$914.5 million in
2000, US$176.7 million in 1999 and US$35.5 million in 1998. Cash flows used in
financing activities in 2000 increased primarily as a result of the repayment
of debt. In 2000, AmBev repaid US$853.9 million, net, of debt. Following the
termination of CADE's interim order in April 2000, AmBev repaid a substantial
portion of the outstanding debt of Antarctica, which had been significantly
overleveraged. In 1999, we repaid approximately US$84.2 million, net, of debt.
However, in 1998 our net borrowings increased by US$165.5 million and we used
US$137.6 million to repurchase shares of our capital stock.

     AmBev paid cash dividends (including in the form of a return of capital
in 2000) and interest attributable to shareholders' equity (including
withholding taxes paid by us on behalf of our shareholders in respect thereof)
of US$118.7 million, US$97.3 million, US$104.4 million, respectively, in 2000,
1999, and 1998.

Debt

     As of December 31, 2000, AmBev's outstanding debt totaled US$1,023.3
million (of which US$618.1 million is due during 2001) and consisted of
US$503.6 million of real-denominated debt and US$519.6 million of
dollar-denominated debt. Cash interest expense of AmBev was US$145.2 million,
US$ 137.8 million and US$147.7 million for 2000, 1999 and 1998, respectively.

     AmBev continually evaluates possible acquisitions of, or investments in,
businesses, products and technologies that are complementary to our business,
although we do not currently have any agreements or understandings to make any
such acquisitions or investments. Any such acquisitions or investments may be
financed with additional debt.

     Long-Term Debt

     AmBev's long-term debt, including the current portion of long-term debt,
totaled US$693.4 million as of December 31, 2000, of which US$458.3 was
denominated in Brazilian reais. The remainder was denominated in U.S. dollars.
The long-term portion of our long-term debt totaled US$416.1 million as of
December 31, 2000. As of December 31, 2000, AmBev had no committed lines of
credit.

     Most of our long-term debt consists of plant expansion program loans from
the Brazilian government and an U.S. dollar-denominated project financing loan
from the International Finance Corporation (IFC). Our reais-denominated
borrowings consist primarily of long-term plant expansion and other loans from
governmental agencies including the Brazilian Economic and Social Development
Bank (BNDES), and BNDES programs, including Fund for Financing the Acquisition
of Industrial Machinery and Equipment (FINAME) and Financing Fund for Studies
and Projects (FINEP). These loans accrue interest at an annual rate of between
1% and 14%, plus indexation of principal, when applicable, for inflation,
pursuant to various indices, including the TJLP.

     As of December 31, 2000, US$161.4 million of our long-term borrowings
were denominated in dollars and consisted primarily of a US$67.5 million
dollar-denominated project finance loan from the International Finance
Corporation (IFC) and US$60.0 million of trade loans. Under the terms of the
IFC facility, interest accrues at a rate of between 2.25% and 2.75% per annum
above the London interbank offered rate (LIBOR). Our loan agreements with IFC
contain restrictive covenants, including financial ratios such as a current
ratio, long-term debt to equity ratio and long-term debt service coverage
ratio. The financial ratios are determined under Brazilian corporation law.
Approximately US$5.0 million of the principal of the loan from the IFC may be
converted into 53,726,500 of AmBev's preferred shares, at the option of the
IFC.


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<PAGE>


     The Brazilian Economic and Social Development Bank (BNDES) has been the
principal lender of long-term funds to AmBev. Loans from the BNDES have been
used for the construction of new plants and plant modernization and expansion.
BNDES loans are a low-cost source of financing.

     The long-term portion of long-term debt as of December 31, 2000, matures
as follows:

Year due                                  December 31, 2000
--------                                  -----------------
                                             (in millions)
2002......................................      US$  161.5
2003......................................           132.3
2004......................................            74.4
2005......................................            37.0
Thereafter................................            10.9
                                                ----------
     Total................................      US$  416.1
                                                ==========

     Short-Term Debt

     As of December 31, 2000, AmBev's short-term debt, excluding the current
portion of long-term debt consisted primarily of financing for the importation
of raw materials and equipment, and working capital financing. As of December
31, 2000, 99.8% of AmBev's short-term debt was denominated in U.S. dollars
with a weighted average annual interest rate of approximately 7%.

     Secured Debt

     Certain of our loans, with an aggregate outstanding principal balance of
US$ 497.1 million at December 31, 2000, are secured by either our facilities
located in, or equipment in our facilities located in, Agudos, Jacarei, Minas
Gerais, Nordeste, Guarulhos, Aguas Claras (Sergipe), Aguas Claras do Sul, Rio
de Janeiro, Brasilia, Teresina, Goiania, Jaguariuna, Joao Pessoa, Manaus,
Montenegro, Aquiraz, Santa Catarina, Cebrasa, Curitiba, and Sapucaia. The
loans, which include the loans provided by the IFC and BNDES, were used to
expand or modernize our facilities and equipment.

Sales Tax Deferrals and Other Tax Credits

     Some states in Brazil provide tax incentives in the form of deferrable
tax payments and partial or complete tax abatements for periods ranging from
one to 20 years to promote investments in the region. AmBev currently
participates in several programs by which a portion of payments of value-added
tax on sales and services (ICMS) due from sales generated by specific
production facilities are deferred for periods of three to twenty years from
their original due date. Percentages deferred typically range from 75% to 40%
over the life of the program. Balances deferred generally accrue interest and
are partially inflation indexed, with adjustments generally set at 60% to 80%
of changes in a general price index. As of December 31, 2000, deferred taxes
totaled US$297.4 million, US$115.7 million of which will become payable in
2003. The remaining amount is payable after 2003.

     AmBev also participates in ICMS value-added tax credit programs offered
by various Brazilian states which provide tax credits to offset ICMS
value-added tax payable. In return, AmBev is committed to meeting certain
operational requirements including, depending on the state, production volume
and employment targets, among others. The grants are received over the lives
of the respective programs. In 2000 and 1999, AmBev recorded US$42.1 million
and US$35.2 million, respectively, of tax credits as a reduction of indirect
taxes on sales. No such benefits were recorded in 1998 and 1997 because the
operational requirements had not yet been met. The benefits granted are not
subject to withdrawal in the event AmBev does not meet the program's targets;
however, future benefits may be withdrawn.


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<PAGE>


Commitments and Contingencies

     AmBev is subject to numerous commitments and contingencies with respect
to tax, labor, distributors and other claims. See "Item 8--Financial
Information--Consolidated Financial Statements and Other Information--Legal
Proceedings" and Note 18 to AmBev's consolidated financial statements.

Capital Investment Program

     Prior to their consolidation into AmBev, Brahma and Antarctica both made
significant investments in their production facilities. From 1994 to 1998,
Brahma pursued an aggressive investment program to modernize and expand its
production facilities, by renovating some existing facilities and replacing
older breweries primarily located in city centers that have high operating
costs with new, technologically advanced facilities located outside city
centers. Brahma's capital investment program closely followed the increase in
consumer demand in Brazil subsequent to the introduction of the real in July
1994. Between 1994 and 1998, Brahma invested a total of US$2,272.6 million
(under U.S. GAAP) for capital expenditures, primarily in its expansion and
modernization program.

     The three main construction projects were the Nova Rio plant in Rio de
Janeiro, the Sergipe plant in northeastern Brazil, and the Rio Grande do Sul
plant in southern Brazil. The Nova Rio plant produces both beer and soft
drinks with highly advanced brewing technology. This plant commenced
operations in May 1996 and has an installed annual production capacity of 13.8
million hectoliters of beer, which represents 23% of AmBev's total annual beer
production capacity in Brazil, and six and a half million hectoliters of soft
drinks. The Sergipe and Rio Grande do Sul facilities, which each have an
annual beer production capacity of three and a half million hectoliters,
became operational at the end of 1998, marking the conclusion of the plan to
increase installed capacity and plant modernization. The Sergipe and Rio
Grande do Sul plants are located in the northeast and south of Brazil,
respectively, and are expected to help AmBev to overcome its peak season
shortages in these regions while keeping pace with expected consumption
growth. In 1998, Brahma closed two old plants in Rio Grande do Sul: a beer
plant and a soft drink plant. These two plants had a combined annual
production capacity of about two million hectoliters.

     In 1998, AmBev invested US$297.5 million in its capital investment
program, which included finishing the construction of the Sergipe and Rio
Grande do Sul beer plants, investments in productivity, an increase of
Brahma's interest in Malteria Pampa, S.A., which owns a malt plant, from 40%
to 100%, and improvements in warehousing used for direct distribution.

     In 1999, AmBev invested US$108.5 million, which included investments in
production and distribution equipment, routine annual replacement of
returnable bottles and crates, investments in point of sale refrigeration
equipment and the development of warehousing related to direct distribution.

     In 2000, AmBev invested US$145.7 million which included investments in
point of sale refrigeration equipment, returnable bottles and crates,
production equipment, equipment and warehousing for direct distribution and
information technology.

     AmBev has budgeted approximately US$245.9 million for capital
expenditures in 2001. Capital expenditures in 2001 will include continued
investments in point of sale refrigeration equipment and in direct
distribution, in addition to recurring expenditures for the upgrade and repair
of equipment and the replacement of bottles and crates, and the purchase of
95.4% of the voting capital of Cerveceria y Malteria Paysandu S.A-Cympay, an
Uruguayan beer producer, for US$27.7 million.


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     Antarctica. Antarctica recently concluded a 10-year capital investment
program, which began in 1989. The purpose of the capital investment program
was to modernize its plants and information systems, restructure its
operations and distribution network to increase efficiency, and introduce new
product lines. Antarctica's capital expenditures totaled US$60.2 million, US$
168.7 million and US$93.4 million in 1999, 1998 and 1997, respectively. Those
capital expenditures were used by Antarctica principally to build two new beer
plants and two new plants for mixed production (beer and soft drinks), upgrade
the beer production facilities at two existing plants, add four new bottling
lines in its plants, purchase and install the R/3 satellite-linked industrial
integration software produced by SAP AG of Germany, replace and upgrade
machinery, and improve effluent and industrial waste treatment processes at
its industrial plants.


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<PAGE>


Item 6.   Directors, Senior Management and Employees

                  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

     The board of directors and the executive officers oversee AmBev's
administration. The board of directors is comprised of three to 15 members who
must be shareholders of AmBev and provides the overall strategic direction of
AmBev. Directors are elected at general shareholders' meetings by holders of
common shares for a three-year term. Day-to-day management is delegated to the
executive officers of AmBev, who must number at least two but no more than 15.
The board of directors appoints executive officers for a two-year term. The
AmBev shareholders' agreement regulates the election of directors of AmBev by
the controlling shareholders. See "Item 7--Major Shareholders and Related
Party Transactions--AmBev Shareholders' Agreement--Management of AmBev".

Directors

     The following table sets forth information with respect to the directors
of AmBev:

                             Board of Directors(1)
<TABLE>
<CAPTION>
<S>                                     <C>       <C>                   <C>          <C>
                                                                      Director      Term
Name                                   Age        Position              Since      Expires
----                                   ---       ----------            -------     -------

Marcel Herrmann Telles................ 51    Co-Chairman and Director   1999        2002
Victorio Carlos De Marchi............. 62    Co-Chairman and Director   1999        2002
Jorge Paulo Lemann.................... 61    Director                   1999        2002
Carlos Alberto da Veiga Sicupira...... 53    Director                   1999        2002
Jose Heitor Attilio Gracioso.......... 69    Director                   1999        2002
Roberto Herbster Gusmao............... 77    Director                   1999        2002
Jose de Maio Pereira da Silva......... 77    Director                   1999        2002

Alternate Members

Roberto Moses Thompson Motta.......... 43    Alternate Director         1999        2002
Vicente Falconi Campos................ 60    Alternate Director         1999        2002
----------------
</TABLE>

(1)  Marcel Telles, a Co-Chairman of the board of directors, was appointed by
     Braco and ECAP, the former controlling shareholders of Brahma, while
     Victorio Carlos De Marchi, a Co-Chairman of the board of directors, was
     appointed by the Zerrenner Foundation, the former controlling shareholder
     of Antarctica. Braco and ECAP appointed two additional directors--Jorge
     Paulo Lemann and Carlos Alberto Sicupira. The Zerrenner Foundation
     appointed three additional directors--Jose Heitor Attilio Gracioso,
     Roberto Herbster Gusmao and Jose de Maio Pereira da Silva. Both alternate
     directors were both appointed by Braco and ECAP, the former controlling
     shareholders of Brahma. The alternate members of the board of directors
     of AmBev were appointed in order to replace, if and when necessary, any
     of the directors appointed by Braco and ECAP.

     The following are brief biographies of each of AmBev's directors:

     Marcel Herrmann Telles. Mr. Telles is the Co-Chairman of the board of
directors of AmBev. He served as Chief Executive Officer of Companhia
Cervejaria Brahma from 1989 to 1999. He is also currently a member of the
board of directors of Lojas Americanas S.A. Mr. Telles has a degree in
economics from the Federal University of Rio de Janeiro and attended the
Owners/Presidents Management Program at Harvard Business School. His principal
business address is Av. Maria Coelho Aguiar, 215, Bloco F. 6(degree)floor, Sao
Paulo, Brazil.

     Victorio Carlos De Marchi. Mr. De Marchi is the Co-Chairman of the board
of directors of AmBev and the Chairman of the board of directors of CBB. Mr.
De Marchi joined Antarctica in 1961 and held various positions during his
tenure, including Chief Executive Officer from 1998 to April 2000. Mr. De
Marchi is also currently president of the Brazilian beer producers'
association (SINDICERV) and is a member of the orientation committee of the
Zerrenner Foundation. Mr. De Marchi has a degree in


                                      70


<PAGE>


economics from Faculdade de Economia, Financas e Administracao de Sao Paulo
and a law degree from Sao Bernardo do Campo Law School. His principal business
address is Av. Maria Coelho Aguiar, 215, Bloco F, 6(degree) floor, Sao Paulo,
Brazil.

     Carlos Alberto da Veiga Sicupira. Mr. Sicupira is a member of the board
of directors of AmBev. He also served as a member of the board of directors of
Brahma from 1990 until 1999. He is also currently a Managing Partner of GP
Investimentos Ltda., a director of Artex S.A. and Submarino.com Ltd. He has
been chairman of the board of directors of Lojas Americanas S.A. since 1992
and served as a member of the board of directors of Playholding since 1995.
Mr. Sicupira has a degree in business administration from the Federal
University of Rio de Janeiro and a degree from the Harvard Business School.
His principal business address is Av. Brig. Faria Lima, 3729, 7(degree)floor,
Sao Paulo, Brazil.

     Jorge Paulo Lemann. Mr. Lemann is a member of the board of directors of
AmBev. He is also a board member of Lojas Americanas S.A. in Brazil, the
Gillette Company and Swiss Re; Chairman of the Latin American Advisory
Committee of the New York Stock Exchange; founder and board member of Fundacao
Estudar, provider of scholarships for needy students in Brazil; and member of
the International Advisory Boards of the Credit Suisse Group and
DaimlerChrysler. He previously served as a member of the board of directors of
Brahma from 1990 to 2001. He holds a degree in economics from Harvard Business
School. His principal business address is Av. Brig. Faria Lima, 3729,
7(degree) floor, Sao Paulo, Brazil.

     Jose de Maio Pereira da Silva. Mr. Pereira da Silva is a member of the
board of directors of AmBev. He joined Antarctica in 1938 and held various
positions during his tenure. He served on the board of directors from
1958-1978 and from 1994 until April 2000. Mr. Pereira da Silva is also a
member of the orientation committee of the Zerrenner Foundation. His principal
business address is Alameda Itu, 852, 19(degree) floor, Sao Paulo, Brazil.

     Jose Heitor Attillo Gracioso. Mr. Gracioso is a member of the board of
directors of AmBev. Mr. Gracioso joined Antarctica in 1946 and held various
positions during his tenure. In 1994, Mr. Gracioso was elected to Antarctica's
board of directors and, in 1999, he was elected Chairman of the board of
directors of Antarctica, a position he held until April 2000. He holds a
degree in marketing from the Escola Superior de Propaganda de Sao Paulo, a
degree in business administration from Fundacao Getulio Vargas and a degree in
law from Sao Bernardo do Campo Law School. His principal business address is
Alameda Itu, 852, 19(degree) floor, Sao Paulo, Brazil.

     Roberto Herbster Gusmao. Mr. Gusmao is a member of the board of directors
of AmBev. He was previously Vice-Chairman of the board of directors of
Antarctica from 1998 until April 2000. Mr Gusmao was Chief Executive Officer
of Cervejaria Antarctica-Niger S.A. from 1968 to 1982, and from 1986 to 1997.
He was the Brazilian Minister of Trade and industry from 1985 to 1986 and
President of Banco de Desenvolvimento do Estado de Sao Paulo from 1982 to
1983. Mr. Gusmao was also a professor and founder of graduation and
post-graduation programs at Fundacao Getulio Vargas from 1954 to 1969. Mr.
Gusmao has a law degree from the University of Minas Gerais Law School. His
principal business address is Alameda Itu, 852, 19(degree)floor, Sao Paulo,
Brazil. e Roberto Moses Thompson Motta. Mr. Motta is an alternate member of
the board of directors of AmBev. Mr. Motta is an officer of GP Investimentos
Ltda. He worked in the corporate finance department of Banco de Investimentos
Garantia S.A. from 1986 to 1992. He holds a degree in engineering from the
Pontificia Universidade Catolica do Rio de Janeiro, and an M.B.A. from the
Wharton School of the University of Pennsylvania. His principal business
address is Av. Brig. Faria Lima, 3729, 7(degree)floor, Sao Paulo, Brazil.

     Vincente Falconi Campos. Mr. Campos is an alternate member of the board
of directors of AmBev. Mr. Campos serves as President of the institutional
council of Fundacao de Desenvolvimento Gerencial & FDG. He is also a
consultant for the Brazilian government and Brazilian and multinational
companies.


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<PAGE>


He holds a degree in mining and metal engineering from the Federal University
of Minas Gerais. His principal business address is Av. Contomo, 7962,
10(degree) floor, Belo Horizonte, Brazil.

Executive Officers

     The following table sets forth information with respect to the executive
officers of AmBev:
<TABLE>
<CAPTION>
<S>                                     <C>                    <C>                   <C>                 <C>
                                                  Executive Officers
                                                                               Current Position        Term
Name                                     Age                  Title               Held Since          Expires
----                                     ---                  -----               ----------          -------

Magim Rodriguez Junior.................    59 Chief Executive Officer                1999                2003
Luis Felipe Pedreira Dutra Leite.......    35 Chief Financial Officer and            2000                2003
                                              Investor Relations Officer
Jose Adilson Miguel....................    59 Retail Officer                         2000                2003
Claudio Braz Ferro.....................    46 Manufacturing  Officer                 2000                2003
Carlos Alves de Brito..................    40 Sales Officer                          2000                2003
Guilherme Rodolfo Laager...............    44 Logistics and Information              2000                2003
                                              Officer
Juan Manuel Vergara Galvis.............    41 Executive Officer of Soft drink        2000                2002
                                              and Nonalcoholic Beverages
                                               Division
Mauricio Luis Luchetti.................    42 People and Quality Officer             2000                2003
Miguel Nuno da Mata Patricio...........    34 Marketing Officer                      2000                2002
</TABLE>


     The following are brief biographies of each of AmBev's executive
officers.

     Carlos Alves de Brito. Mr. Brito is the Executive Sales Officer of AmBev
and CBB. He joined Brahma in 1989 and has held various management positions
during his tenure. Mr. Brito holds a degree in mechanical engineering from the
Federal University of Rio de Janeiro and an M.B.A. from Stanford University.
His principal business address is Av. Maria Coelho Aguiar, 215, Bloco F,
6(degree)floor, Sao Paulo, Brazil.

     Claudio Braz Ferro. Mr. Ferro is the Executive Manufacturing Officer of
AmBev and CBB. He started working with Brahma in 1978 as a Brew Master and was
responsible for the production and bottling divisions. In 1984, he was
appointed Manager of the Industrial Department and in 1990, Manager of the Rio
de Janeiro plant. He holds a degree in industrial chemistry from the Federal
University of Santa Maria. His principal business address is Av. Maria Coelho
Aguiar, 215, Bloco F, 6(degree) floor, Sao Paulo, Brazil.

     Guilherme Rodolfo Laager Mr. Laager is the Executive Logistics and
Information Officer of AmBev. He joined Brahma in 1989 as the manager of
Brahma's Minas Gerais and Jacarei plants. Mr. Laager holds a degree in civil
engineering from the Federal University of Rio de Janeiro. His principal
business address is Av. Maria Coelho Aguiar, 215, Bloco F, 6(degree) floor,
Sao Paulo, Brazil.

     Jose Adilson Miguel. Mr. Miguel is the Executive Distribution Officer of
AmBev. He has held various management positions during his tenure with Brahma
since 1962. He was named Commercial Manager in 1970, General Marketing Manager
in 1976, and Marketing Officer in 1980. His principal business address is Av.
Maria Coelho Aguiar, 215, Bloco F, 6(degree)floor, Sao Paulo, Brazil.

     Juan Manuel Vergara Galvis. Mr. Vergara is the Executive Soft Drink and
Nonalcoholic Beverages Officer of AmBev. Prior to this appointment he was the
Marketing Officer of Brahma from 1997 to 2000. He holds a degree in business
administration from the Colegio de Estudos Superiores de


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<PAGE>



     Administracion, in Bogota, Colombia. His principal business address is
Av. Maria Coelho Aguiar, 215, Bloco F, 6(degree)floor, Sao Paulo, Brazil.

     Luis Felipe Pedreira Dutra Leite. Mr. Dutra is the Chief Financial
Officer and Investor Relations Officer of AmBev and the Chief Financial
Officer of CBB. He joined Brahma in 1990 and has held numerous positions
during his tenure. Mr. Dutra holds a degree in economics and an M.B.A. in
financial management from the University of Sao Paulo. His principal business
address is Av. Maria Coelho Aguiar, 215, Bloco F, 6(degree)floor, Sao Paulo,
Brazil.

     Magim Rodriguez Junior. Mr. Rodriguez has been the Chief Executive
Officer of AmBev since his appointment in 1999. He is also Chief Executive
Officer of CBB. He has been associated with Brahma since 1989, serving first
as Marketing Officer. He holds a degree in business administration and
accounting from Mackenzie University. His principal business address is Av.
Maria Coelho Aguiar, 215, Bloco F, 6(degree)floor, Sao Paulo, Brazil.

     Mauricio Luis Luchetti. Mr. Luchetti is the People and Quality Officer of
AmBev. He joined Brahma in 1985 and has held various management positions
during his tenure. Mr. Luchetti holds a degree in business administration from
the Pontificia Universidade Catolica in Rio de Janeiro. His principal business
address is Av. Maria Coelho Aguiar, 215, Bloco F, 6(degree)floor, Sao Paulo,
Brazil.

     Miguel Nuno da Mata Patricio. Mr. Patricio is the Executive Officer of
Marketing of AmBev. He joined the company in 1999. Mr. Patricio has a degree
in business administration from Fundacao Getulio Vargas in Sao Paulo. His
principal business address is Av. Maria Coelho Aguiar, 215, Bloco F,
6(degree)floor, Sao Paulo, Brazil.

Compensation

     The aggregate remuneration of all members of the board of directors and
senior management of AmBev (19 persons in all) in 2000 for services in all
capacities amounted to US$12.5 million, including contingent or deferred
compensation accrued during the year, even if payable at a later date. The
members of the board of directors and senior management received some
additional benefits generally provided to AmBev employees and their
beneficiaries and covered dependents, such as medical assistance, educational
expenses and supplementary social security benefits. All such benefits were
provided through the Zerrenner Foundation and, prior to its merger with the
Brahma Welfare Foundation, the Brahma Welfare Foundation. The board of
directors and AmBev's senior management also receive benefits pursuant to
AmBev's pension, profit-sharing plan, and share purchase plan. For a
description of these plans see "--Plans". The total amounts set aside or
accrued by the company or its subsidiaries in 2000 to provide pension,
retirement or similar benefits to directors and senior management of AmBev was
US$0.5 million.

     There are no agreements between AmBev and any of its directors providing
for benefits upon termination of employment.

Board Practices

     General

     All of the current members of the Board of Directors of AmBev have been
members since 1999 and their term expires in 2002. There are no agreements
between AmBev and any of its directors providing for benefits upon termination
of employment.

     Fiscal Committee

     AmBev has a nonpermanent fiscal committee (Conselho Fiscal) which reviews
AmBev's internal financial statements, meets with AmBev's independent
accountants on financial matters and recommends


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<PAGE>


the selection of independent accountants for AmBev and its subsidiaries.
Current members of the committee are Luiz Fernando Mussolini, Ricardo Scalzo
and Antonio Carlos Monteiro. Mr. Monteiro is a representative of preferred
shareholders. Alternate members of the fiscal committee are Ary Waddington,
Jose Fiorita and Marcelo de Souza Muniz.

Employees

     As of March 31, 2001, AmBev and its subsidiaries had approximately 18,
172 employees, approximately 63.2% of whom were engaged in production, 33.0%
of whom were engaged in sales and distribution and 3.8% of whom were engaged
in administration. The number of temporary employees employed by AmBev is
typically less than 1% of AmBev's total workforce. The following table sets
forth the number of employees of AmBev and its subsidiaries as of the end of
the years indicated:

                                   Employees
                              As of December 31,
               ----------------------------------------------------
                  2000*               1999 **            1998**
                  ----                ----               ----

                 18,172               9,416              10,708

     -----------------

     *    Includes the employees of AmBev, Brahma and Antarctica and their
          respective subsidiaries.

     **   Includes only the employees of Brahma and its subsidiaries.

     The following table shows the geographical distribution of AmBev's
employees as of March 31, 2001:

                 Geographical Distribution of AmBev Employees
------------------------------------------------------------------------------
Location                                                  Number of Employees
--------                                                  -------------------
Brazil....................................................        16,794
Argentina.................................................           391
Uruguay...................................................           393
Venezuela.................................................           594
                                                                --------
                                                                  18,172

     The number of temporary employees employed by AmBev is typically less
than 1% of AmBev's total workforce.

     Productivity

     The following table shows our productivity as measured by hectoliters
sold per production employee in 2000, 1999 and 1998. Productivity is
calculated by dividing the total volume of beer and soft drinks sold by the
number of employees involved in the production process at the end of each
period:

              Productivity in Hectoliters Per Production Employee

                2000*               1999**               1998**
                ----                ----                 ----

               7,556hl             8,776hl               8,684hl

    -----------------
    *   Based on the employees of AmBev, Brahma and Antarctica and
        their respective subsidiaries and the total volume of beer
        and soft drinks sold by Brahma and its subsidiaries and by
        Antarctica and its subsidiaries for the year ended December
        31, 2000, aggregated on a pro forma basis.

    **  Based only on the employees of Brahma and its subsidiaries
        and the total volume of beer and soft drinks sold by Brahma
        and its subsidiaries at the end of the year.

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<PAGE>


     Training

     In 1998, Brahma created the "Brahma University" (now "AmBev University")
to train and improve our employees' performance, and the performance of our
distributors' employees. In 2000, the company's training facility provided
in-house training for more than 13,000 employees of AmBev and its
distributors. At the management level, AmBev's senior management and executive
officers participate in several business and technical training programs at
leading United States and European universities. Training schools in our major
facilities provide courses, mainly technical in nature, for supervisory and
operating personnel. In an initiative by the Brazilian beer producers'
association Sindicerv, AmBev and other beer producers have established a
training school at Vassouras, near Rio de Janeiro, which includes a
micro-brewery, bottling line and malting plant. AmBev believes that its
personnel are well trained and kept abreast of current technical and business
developments.

     Industrial Relations

     About 5% of AmBev's production employees are represented by labor unions.
The number of administrative and distribution employees represented by labor
unions is not significant. Salary negotiations are conducted annually between
the workers' unions and AmBev. Collective bargaining agreements covering both
union and nonunion production employees are negotiated separately for each
facility. AmBev's collective bargaining agreements have a term of one year,
and AmBev intends to enter into new collective bargaining agreements on or
prior to the expiration of the existing agreements. AmBev believes that its
relations with its employees are satisfactory, and there have been no strikes
or significant labor disputes in the past seven years.

     Health and Severance Benefits

     In addition to wages, AmBev's employees receive additional benefits from
AmBev. Some of these benefits are mandatory under Brazilian law, some are
provided for in collective bargaining agreements, and others are voluntarily
given by AmBev. The benefits packages of AmBev's employees consist of benefits
provided both by AmBev directly and by AmBev through the Zerrenner Foundation,
which provides medical, dental, educational and social assistance to current
and retired employees of AmBev and their beneficiaries and covered dependents,
either for free or at a reduced cost. AmBev may voluntarily contribute up to
10% of its consolidated net income, as determined in accordance with Brazilian
corporation law and AmBev's by-laws, to support the Zerrenner Foundation. As
part of the process of merging the Brahma Welfare and Zerrenner Foundations
(see Item 7--"Major Shareholders and Related Party Transactions"--Major
Shareholders--Share Ownership History of AmBev's Major Shareholders), an
actuarial evaluation was carried out to determine the level of contributions
required to be made to the Zerrenner Foundation to provide benefits to all
employees compatible with those formerly provided by the Brahma Welfare
Foundation. The actuarial evaluation concluded the need for additional
contributions by AmBev over the next several years of approximately R$100
million (US$51.1 million based on the December 31, 2000 exchange rate). On
April 27, 2001, as permitted by our by-laws, we made a contribution of US$9.0
million to the Zerrenner Foundation. See "Item 5--Operating and Financial
Review--Operating Results--Zerrenner Foundation".

     AmBev is required to contribute 8% of each employee's gross pay to an
account maintained in the employee's name in the government severance
indemnity fund (FGTS). Under Brazilian law, AmBev is also required to pay
termination benefits to employees dismissed without cause equal to 40% of the
accumulated contributions made by AmBev to the FGTS during the employee's
period of service.


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<PAGE>


Plans

     Stock Ownership Plan

     AmBev has a stock ownership plan designed to obtain and retain the
services of qualified directors, executives and employees. Both common and
preferred shares are granted in the plan. As of December 31, 2000, the plan
had outstanding and exercisable options to acquire 1,241,355,000 shares of
AmBev. Shares available at December 31, 2000 for options to be granted in the
future totalled 1,932,304,000 shares. The plan is administered by a committee,
which includes non-management members of the board of directors of AmBev. This
committee periodically creates programs under the stock ownership plan,
defining the terms and employees to be included, and establishes the price at
which the options are to be issued. This price may not be less than 90% of the
average price of the shares traded on the stock market on the previous three
business days, adjusted by a monetary correction index to be defined by the
committee for each program. The number of shares which may be granted in each
year cannot exceed 5% of the total number of shares outstanding of each type
of shares. When share options are exercised, AmBev issues new shares or
transfers treasury shares to the option holder. Stock options granted have no
final date to be exercised. When the grantee leaves the company (other than
upon retirement), the options are forfeited. If an employee decides to sell
shares acquired pursuant to the exercise of his or her options or an employee
leaves the company, AmBev has the right to buy such shares at a price equal
to:

     o  the inflation-indexed price paid by such employee, if the employee
        sells the shares during the first 30 months after the exercise of the
        option;

     o  50% of the inflation-indexed price paid, plus 50% of the prevailing
        market price, if the employee sells the shares after the first 30
        months but before the 60th month after the exercise of the option; or

     o  the market price, if the employee sells the shares more than 60 months
        after the exercise of the option.

     The Company finances the purchase of shares in accordance with the
established plan rules. Financing arrangements are normally for periods of not
more than four years and include interest of 8% per annum over a designated
general price index. These loans are guaranteed by the shares issued upon the
exercise of options. At December 31, 2000 the outstanding balance of these
loans amounted to US$84.5 million and are classified as a deduction from
shareholders' equity.

     Pension Plans

         AmBev Pension Plan

     AmBev's pension plans are administered by the AmBev Pension Fund
(Instituto AmBev de Previdencia Privada) which is the successor of the Brahma
Pension Fund--Instituto Brahma de Seguridade Social-- as from December 8,
2000.

     The AmBev Pension Fund sponsors a defined-benefit pension plan and
operates a defined- contribution plan, which supplements benefits that the
Brazilian government social security system provides to our employees and
employees of our Brazilian subsidiaries. The AmBev Pension Fund was
established solely for the benefit of our employees and its assets are held
independently. We nominate the three directors of the AmBev Pension Fund. As
of December 31, 2000, we had 5,332 participants in our plan of which 2,389
participated in the defined benefit plan. We contributed 3.1% and 5.4% of each
employee nominal monthly salary to the defined benefit plan and to the defined
contribution plan in 2000, respectively.


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<PAGE>


     The AmBev Pension Fund is available to both active and retired employees.
Three months after joining us, employees may opt to join the defined
contribution plan. Upon leaving (unless upon retirement) members are required
to leave the AmBev Pension Fund. Members who joined after 1990 and request to
leave will receive their contributions actualized in a single installment.

     Prior to May 1998, when the defined contribution plan was launched, there
was only a defined benefit plan. The defined benefit plan was closed to new
participants as of this date. New employees of AmBev can only join the defined
contribution plan. At the time of adoption of the defined contribution plan,
active participants were given the option either to remain in the old plan, or
transfer their accumulated benefits to the defined contribution plan. The
defined contribution plan covers substantially all new employees.

     Pension costs relating to the AmBev contribution plan for the year ended
December 31, 2000 were approximately US$1.5 million compared to US$1.7 million
in 1999. Pension costs relating to the Antarctica contribution plan for the
year ended December 31, 2000, were approximately US$2.0 million compared to
US$1.6 million in 1999.

     The plan assets are comprised principally of time deposits and equity
securities (including 9,595,170 preferred shares and 88,664,850 common shares
of AmBev at December 31, 2000 with a total fair value of US$23.6 million as of
December 31, 2000), government securities and properties. All benefits are
calculated and paid in inflation-indexed Brazilian reais.

         Antarctica Pension Plan

     For the former employees of Antarctica, AmBev is the sponsor of the
Antarctica Normal Plan, which is a defined contribution plan, and the
Antarctica Special Plan, which is a defined benefit plan. The Antarctica
Normal Plan is available to substantially all active former employees of
Antarctica. This plan provides for employer participation based primarily on
employee participation. The total expense under the Antarctica Normal Plan was
US$2.0 million in the year ended December 31, 2000 (1999 - US$1.6 million).
The Antarctica Special Plan was established in August 1995 to provide benefits
to retiring employees and their beneficiaries. Plan eligibility is contingent
upon age and salary level as of such date, which included an additional group
of employees who would retire over the following few years. The plan has 144
participants in payment status as of December 31, 2000 (1999 - 144). The
benefits paid to participants of the Antarctica Special Plan are based on
final salary.

     Profit-Sharing Plan

     AmBev's by-laws provide for the distribution of up to 10% of AmBev's net
income, as determined in accordance with Brazilian corporation law, to its
employees. Executive officers are eligible for profit-sharing in an amount not
to exceed the lower of their annual remuneration or 5% of AmBev's net income
in the aggregate.

     Payments under AmBev's profit-sharing plan are subject to the
availability of cash resources of AmBev. The size of the executive officers'
bonuses is determined on the basis of individual performance, and is subject
to approval by the board of directors of AmBev. All other employees of AmBev
are entitled to performance-based variable bonuses calculated on an annual
basis. These bonuses vary depending on the achievement by each employee of
specific targets, which are established for each area of the company and then
attributed to each person on an individual basis.

     Expenses of AmBev under these programs are included in general and
administrative expenses and amounted to US$29.3 million (executive
officers--US$3.1 million; other employees--US$26.2 million), in respect of the
year ended December 31, 2000, US$1.9 million (executive officers--zero; other
employees--US$1.9 million) in respect of the year ended December 31, 1999, and
US$36.4 million (executive officers--US$6.6 million; other employees--US$29.8
million) in respect of the year ended


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<PAGE>


December 31, 1998. AmBev did not pay any individual bonus to executive
officers for 1999, since Brahma's goals set earlier in 1999 were not met.

Director and Senior Management Share Ownership

     The following table shows the amount, type and percentage of class of our
equity securities held by members of our board of directors and by senior
management as of April 10, 2001:

                                   Amount and Percentage  Amount and Percentage
Name                                  of Common Shares      of Preferred Shares
                                   --------------------    --------------------
Marcel Herrmann Telles(1)........... 888,214,825  5.56%    345,020,520   1.48%
Victorio Carlos De Marchi(2)........       *                     *
Jorge Paulo Lemann(3)...............       *                     *
Carlos Alberto da Veiga Sicupira(4).       *                     *
Jose Heitor Attilio Gracioso(5).....       *                     *
Roberto Herbster Gusmao(6)..........       *                     *
Jose de Maio Pereira da Silva(7)....       *                     *
Roberto Moses Thompson Motta(8).....       *                     *
Vicente Falconi Campos..............       *                     *
Magim Rodriguez Junior..............       *                     *
Luis Felipe Pedreira Dutra Leite....       *                     *
Jose Adilson Miguel(9)..............       *                     *
Claudio Braz Ferro..................       *                     *
Carlos Alves de Brito...............       *                     *
Guilherme Rodolfo Laager............       *                     *
Juan Manuel Vergara Galvis..........       *                     *
Mauricio Luis Luchetti..............       *                     *
Miguel Nuno da Mata Patricio........       *                     *

---------------------------------

* Indicates that the individual holds less than 1% of the class of securities.

(1)  Does not include 7,363,453,440 common shares owned by Braco S.A. (Braco)
     and Empresa de Administracao e Participacoes S.A. - ECAP (ECAP). Mr.
     Telles owns 12.9% of the voting shares of Braco, which, in turn, owns
     99.7% of the voting shares of ECAP, and is also an intervening party to
     the AmBev shareholders' agreement. See "Item 7--Major Shareholders and
     Related Party Transactions--Major Shareholders--AmBev Shareholders'
     Agreement". Mr. Telles disclaims ownership of the shares of AmBev owned
     by Braco and ECAP. Mr. Telles is also a counsilor of the Zerrenner
     Foundation. For information regarding the shareholdings of the Zerrenner
     Foundation, see "Item 7--Major Shareholders and Related Party
     Transactions--AmBev's Major Shareholders". Does not include warrants to
     subscribe for 10,126,600 common shares and 13,917,020 preferred shares of
     AmBev in April 2003. See "Item 7--Major Shareholders and Related Party
     Transactions--Major Shareholders--Options and Warrrants".

(2)  Mr. De Marchi is a counsilor of the Zerrenner Foundation. For information
     regarding the shareholding of the Zerrenner Foundation, see "Item
     7--Major Shareholders and Related Party Transactions--AmBev's Major
     Shareholders".

(3)  Does not include 7,363,453,440 common shares owned by Braco and ECAP. Mr.
     Lemann owns 58.8% of the voting shares of Braco, which, in turn, owns
     99.7% of the voting shares of ECAP and is also an intervening party to
     the AmBev shareholders' agreement. See "Item 7--Major Shareholders and
     Related Party Transactions--Major Shareholders--AmBev Shareholders'
     Agreement". Mr. Lemann disclaims ownership of the shares of AmBev owned
     by Braco and ECAP.

(4)  Does not include 7,363,453,440 common shares owned by Braco and ECAP. Mr.
     Sicupira owns 12.9% of the voting shares of Braco, which, in turn, owns
     99.7% of the voting shares of ECAP, and is also an intervening party to
     the AmBev shareholders' agreement. See "Item 7--Major Shareholders and
     Related Party Transactions--Major Shareholders--AmBev Shareholders'
     Agreement". Mr. Sicupira disclaims ownership of the shares of AmBev owned
     by Braco and ECAP.

(5)  Mr. Gracioso is a counsilor of the Zerrenner Foundation. For information
     regarding the shareholding of the Zerrenner Foundation, see "Item
     7--Major Shareholders and Related Party Transactions--AmBev's Major
     Shareholders".


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<PAGE>


(6)  Mr. Gusmao is a counsilor of the Zerrenner Foundation. For information
     regarding the shareholding of the Zerrenner Foundation, see "Item
     7--Major Shareholders and Related Party Transactions--AmBev's Major
     Shareholders".

(7)  Mr. da Silva is a counsilor of the Zerrenner Foundation. For information
     regarding the shareholding of the Zerrenner Foundation, see "Item
     7--Major Shareholders and Related Party Transactions--AmBev's Major
     Shareholders".

(8)  Does not include 7,363,453,440 common shares owned by Braco and ECAP. Mr.
     Motta is an executive officer of Braco and ECAP. Mr. Motta disclaims
     beneficial ownership of the shares of AmBev owned by Braco and ECAP.

(9)  Mr. Miguel is a counsilor of the Zerrenner Foundation. For information
     regarding the shareholding of the Zerrenner Foundation, see "Item
     7--Major Shareholders and Related Party Transactions--AmBev's Major
     Shareholders".


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<PAGE>


Item 7.  Major Shareholders and Related Party Transactions

                              MAJOR SHAREHOLDERS

Introduction

     As of April 10, 2001, AmBev had 15,976,336,195 common voting shares and
23,238,852,050 preferred nonvoting shares outstanding. AmBev has registered
two classes of American Depositary Shares (ADSs) pursuant to the Securities
Act: ADSs evidenced by American Depositary Receipts (ADRs) representing 100
preferred shares, and ADSs evidenced by ADRs representing 100 common shares.
As of April 10, 2001, there were 94,304,265 preferred ADSs outstanding
(representing 9,430,426,500 preferred shares) and 90,600 common ADSs
outstanding (representing 9,060,000 common shares). AmBev ADRs are issuable by
The Bank of New York pursuant to deposit agreements for common and preferred
shares.

Control

     AmBev is controlled by Braco S.A. (Braco), Empresa de Administracao e
Participacoes S.A. - ECAP (ECAP) and Fundacao Antonio e Helena Zerrenner
Instituicao Nacional de Beneficencia (the Zerrenner Foundation), which own in
the aggregate 68.76% of AmBev's common shares. In addition, Braco, ECAP and
the Zerrenner Foundation, as well as Marcel Telles, Jorge Paulo Lemann and
Carlos Sicupira, as intervening parties, are parties to a shareholders'
agreement relating to AmBev. See "--AmBev Shareholders' Agreement". As of
April 10, 2001, Braco and ECAP collectively own 46.09% of the common shares of
AmBev. Messrs. Telles, Lemann and Sicupira collectively own 84.5% of the
voting shares of Braco, which, in turn, owns 99.7% of the voting shares of
ECAP. Mr. Telles individually owns 5.6% of the common shares of AmBev and is
also a Counsilor of the Zerrenner Foundation. The Zerrenner Foundation owns
22.7% of the common shares of AmBev.

Share Ownership History of AmBev's Major Shareowners

     As of June 30, 1999 Braco and ECAP together held approximately 55.1% of
the common shares of Brahma, and the Zerrenner Foundation held approximately
88.1% of the common shares of Antarctica. On July 1, 1999, as a result of the
controlling shareholders' contribution, Braco, ECAP and the Zerrenner
Foundation became the holders of 33.69%, 42.27% and 24.04% respectively, of
AmBev's common shares, and AmBev became the controlling shareholder of Brahma
and Antarctica. Braco also contributed nonvoting preferred shares of Brahma to
AmBev in exchange for 67,903,450 nonvoting preferred shares of AmBev, and the
Zerrenner Foundation contributed nonvoting preferred shares of Antarctica to
AmBev in exchange for 267,843,425 nonvoting preferred shares of AmBev.

     As a result of the Antarctica and Brahma conversions on September 15,
1999 and September 14, 2000, respectively, the percentage common shareholdings
of Braco, ECAP and the Zerrenner Foundation were reduced to approximately 60%
of the AmBev common shares.

     Between September 15, 1999 and October 20, 2000, Braco purchased an
additional 31,461,605 AmBev common shares, increasing its holding to
3,251,471,215 AmBev common shares.

     Prior to September 14, 2000, the date of the Brahma conversion, Mr.
Telles held in his individual capacity approximately 888,214,820, or 6.7%, of
the Brahma common shares, and 345,020,520 AmBev preferred shares. As a result
of the Brahma conversion, Mr. Telles became the holder, in his individual
capacity, of approximately 888,214,820, or, at that time, 5.6%, of AmBev
common shares, and 345,020,520 AmBev preferred shares.

     Braco subsequently disposed of all of its AmBev preferred shares.


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     Between October 20, 2000 and November 20, 2000, Braco purchased an
additional 72,414,000 AmBev common shares, increasing its holdings to
3,323,885,215 AmBev common shares.

     On October 27, 2000, the Brahma Welfare Foundation, a nonprofit entity
established by Brahma to provide social and other welfare benefits to its
employees, was merged into the Zerrenner Foundation. As a result, the
1,323,696,770 AmBev common shares owned by the Brahma Welfare Foundation are
now owned by the Zerrenner Foundation, increasing the Zerrenner Foundation's
holdings to 3,621,305,410 AmBev common shares, and the 203,823,240 AmBev
preferred shares owned by the Brahma Welfare Foundation are now owned by the
Zerrenner Foundation, increasing the Zerrenner Foundation's holdings to
471,666,665 preferred shares.

Share Buyback Program

     On April 25, 2001, AmBev reauthorized its share buyback program which had
been initiated on December 13, 2000. Under the program, AmBev is authorized to
repurchase up to R$400 million of its shares. Since the original program was
initiated, R$101.5 million has been used to repurchase 50,005,000 common
shares and 150,370,000 preferred shares. The remaining amount allocated for
future share repurchases is approximately R$300 million. According to
Brazilian law, buyback programs are valid for a maximum of 90 days (but may
then be reauthorized). The maximum number of its shares that may be held by a
company (unless cancelled) is 10% of each class of outstanding shares.

AmBev's Major Shareholders

     The following table sets forth information, as of April 10, 2001, with
respect to any person known to AmBev to be the beneficial owner of 5% or more
of AmBev's outstanding shares:
<TABLE>
<CAPTION>
<S>                                                         <C>                      <C>
                                                       Amount and Percentage      Amount and Percentage
                                                          of Common Shares         of Preferred Shares
                                                       ----------------------    -----------------------

The Bank of New York - ADR      Department(1)....          9,560,000   0.06%     9,385,686,605   40.40%
Braco(2).........................................      7,363,453,440  46.09%         --            --
ECAP.............................................      4,039,568,225  25.29%         --            --
Zerrenner Foundation(3)..........................      3,621,305,410  22.67%       471,666,665    2.03%
Marcel H. Telles(4)..............................        888,214,825  5.56%        345,020,520    1.48%
Jorge Paulo Lemann(5)............................                 --    --            --            --
Carlos A. Sicupira(6)............................                 --    --            --            --
</TABLE>

--------------

(1)  Represents the number of shares held in the form of ADSs. The Bank of New
     York is the depositary of AmBev shares in accordance with the deposit
     agreement entered into with AmBev and the owners of AmBev ADSs.

(2)  Includes 4,039,568,225 common shares owned by ECAP. Braco owns 99.7% of
     the voting shares of ECAP. Mr. Telles, a Co-Chairman of the board of
     directors of AmBev and a counsilor of the Zerrenner Foundation, Mr.
     Lemann and Mr. Sicupira, each a member of the board of directors of
     AmBev, own 12.9%, 58.8% and 12.9%, respectively, of the voting capital of
     Braco.

(3)  Mr. Telles, Victorio Carlos De Marchi, Jose Heitor Attilio Gracioso,
     Roberto Herbster Gusmao and Jose de Maio Pereira da Silva, directors of
     AmBev, and Jose Adilson Miguel, an officer of AmBev, are counsilors of
     the Zerrenner Foundation.

(4)  Does not include 7,363,453,440 common shares owned by Braco and ECAP. Mr.
     Telles, a co-chairman of the board of directors of AmBev, owns 12.9% of
     the voting shares of Braco, which, in turn, owns 99.7% of the voting
     shares of ECAP, and is also an intervening party to the AmBev
     shareholders' agreement. See "--AmBev Shareholders' Agreement". Mr.
     Telles disclaims ownership of the shares of AmBev owned by Braco and
     ECAP. Mr. Telles is also a counsilor of the Zerrenner Foundation. Does
     not include warrants to subscribe for 10,126,600 common shares and
     13,917,020 preferred shares of AmBev in April 2003. See "Item 7 -- Major
     Shareholders and Related Party transactions--Major Shareholders--Options
     and Warrrants".

(5)  Does not include 7,363,453,440 common shares owned by Braco and ECAP. Mr.
     Lemann a member of the board of directors of AmBev, owns 58.8% of the
     voting shares of Braco, which , in turn, owns 99.7% of the voting shares
     of ECAP,


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<PAGE>


     and is also an intervening party to the AmBev shareholders' agreement.
     See "--AmBev Shareholders' Agreement". Mr. Lemann disclaims ownership of
     the shares of AmBev owned by Braco and ECAP.

(6)  Does not include 7,363,453,440 common shares owned by Braco and ECAP. Mr.
     Sicupira, a member of the board of directors of AmBev, owns 12.9% of the
     voting shares of Braco, which , in turn, owns 99.7% of the voting shares
     of ECAP, and is also an intervening party to the AmBev shareholders'
     agreement. See "--AmBev Shareholders' Agreement". Mr. Sicupira disclaims
     ownership of the shares of AmBev owned by Braco and ECAP.

     For a description of the Company's major shareholders' voting rights, See
"--AmBev Shareholders Agreement".

Options and Warrants

     On February 14, 1996, Brahma's board of directors approved the private
placement of 2,024,652,595 warrants at R$50 per 5,000-share lot, convertible
on a one-to-one basis in April 2003 at a strike price of R$1,000.00. Each
warrant was originally issued to holders of a block of 85 shares of Brahma,
whether preferred or common. The subscription price was originally set at
R$0.20 per common or preferred share. The subscription price for each of the
warrants is adjusted pursuant to the IGP-M inflation index, reduced by
dividends paid, and accrues interest at the rate of 12% per year. At the
Brahma shareholders' meeting that considered the Brahma conversion, common
shareholders voted to cancel the Brahma warrants and replace them with new
AmBev warrants, which entitle holders to subscribe for AmBev shares in
accordance with the original terms and conditions applicable to the Brahma
warrants. The 2,024,652,595 warrants entitled holders to subscribe for a total
of 710,195,105 newly issued common shares and 1,314,457,490 newly issued
preferred shares of AmBev. The right of each warrant to subscribe for shares
will be adjusted proportionately should there be any splits, reverse splits or
distributions of stock dividends.

     In connection with an IFC loan (which had an outstanding balance of
US$67.5 million on December 31, 2000), the IFC has an option to convert an
amount equal to US$5 million of the principal amount of the loan into 53.3
million of AmBev's preferred shares. See "Item 5--Operating and Financial
Review and Prospects--Liquidity and Capital Resources--Debt--Long-Term Debt".

AmBev Shareholders' Agreement

     On July 1, 1999, the Zerrenner Foundation, Braco and ECAP, as well as
AmBev and Messers. Jorge Paulo Lemann, Marcel Telles and Carlos Alberto
Sicupira, the latter three as intervening parties, entered into a
shareholders' agreement with respect to the voting of shares of AmBev and the
voting by AmBev of the shares of its subsidiaries (including Brahma and
Antarctica), among other matters.

     Management of AmBev

     Although each common share of AmBev entitles shareholders to one vote in
connection with the election of AmBev's board of directors, AmBev's
controlling shareholders, the Zerrenner Foundation, Braco and ECAP, have the
ability to elect the majority of AmBev's directors. Because the election of
any director by minority (non-controlling) shareholders would require the
adoption of a cumulative vote procedure, the provisions of the shareholders'
agreement on the management of AmBev are based on the assumption that no
directors will be elected by minority shareholders of AmBev.

     Under the shareholders' agreement, each of the Zerrenner Foundation,
Braco and ECAP will have representation on the board of directors of AmBev and
its subsidiaries. The boards of directors of AmBev and its subsidiaries will
each be comprised of at least three and no more than 15 regular members and no
more than 15 alternates, with a term of office of three years and reelection
being permitted. The Zerrenner Foundation will have the right to appoint four
directors and their respective alternates to the boards of directors of AmBev
and of its subsidiaries, so long as it maintains at least a minimum ownership
of AmBev voting shares equivalent to the ownership of common shares that the
Zerrenner Foundation held at the time that the shareholders' agreement was
entered into. At the time that the


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<PAGE>


shareholders' agreement was entered into, the Zerrenner Foundation held
459,521,728 common shares, which adjusted for the five-for-one stock split
that took effect on October 23, 2000 and is currently equivalent to
2,297,608,640 common shares. The Zerrenner Foundation is not allowed under the
shareholders' agreement to appoint more than four directors in the event that
its holding of AmBev common shares increases. The shareholders' agreement also
does not provide for a proportional reduction in the number of directors
appointed by the Zerrenner Foundation, in case of reduction in the number of
AmBev common shares that it owns. As a result, any reduction in the holding of
the Zerrenner Foundation below 2,297,608,640 AmBev common shares would cause
it to lose the right to appoint any director of AmBev. Braco and ECAP, acting
jointly, have the right to appoint members and their respective alternates to
the boards of directors of AmBev and its subsidiaries, in a number
proportionate to the number of members appointed by the Zerrenner Foundation.
Such proportion is based on the ratio between the Zerrenner Foundation's
holding and the aggregate holdings of Braco and ECAP in the voting capital of
AmBev.

     The shareholders' agreement provides that AmBev will have two Co-Chairmen
with identical rights and duties, one appointed by the Zerrenner Foundation
and the other by Braco and ECAP, jointly. In the event of a deadlock, neither
of the Co-Chairmen has a deciding vote on matters submitted to the board of
directors of AmBev.

     Each of the Zerrenner Foundation, or Braco and ECAP together, may remove
a director that it has appointed to the board of directors of AmBev or its
subsidiaries, and each also has the right to appoint the respective
replacement or a new alternate, if the originally appointed alternate is
confirmed for the vacant position.

     Each of the Zerrenner Foundation, Braco and ECAP has agreed to exercise
its voting rights in the shareholders' meetings of AmBev and its subsidiaries
in such a way that it may elect the largest possible number of directors in
each of AmBev and its subsidiaries. The Zerrenner Foundation, Braco and ECAP
will agree on the method of casting their votes in order to accomplish this
purpose in the event of adoption of cumulative vote procedure under Brazilian
law, under which each common share is entitled to as many votes as there are
directors to be elected.

     The shareholders' agreement provides that AmBev will have one Chief
Executive Officer (Diretor Geral) and Officers (Diretores Adjuntos), to be
elected by AmBev's board of directors.

     Preliminary Meetings and Exercise of Voting Rights

     On matters submitted to a vote of the shareholders or their
representatives in the boards of directors of AmBev or its subsidiaries, the
Zerrenner Foundation, Braco and ECAP have agreed to endeavor first to reach a
consensus with respect to voting their common shares of each of AmBev and its
subsidiaries, and as to how to direct their representatives to vote on the
matter being submitted. In order to reach such a consensus, the shareholders'
agreement provides that the parties shall hold a preliminary meeting in
advance of all meetings of shareholders or boards of directors of AmBev or of
its subsidiaries, with the purpose of discussing and determining a consensus
position to be taken by the parties in such meetings. This procedure makes it
more likely that a matter approved by the controlling shareholders will also
be approved at a shareholders' meeting.

     If the parties fail to reach a consensus with respect to a particular
matter, the position to be adopted by all parties to the agreement will be
determined by the group holding the greatest number of AmBev voting common
shares, which currently is Braco and ECAP. However, this rule does not apply
in connection with the election of members of boards of directors, as
described above under


                                      83


<PAGE>


"--Management of AmBev", and with respect to fundamental matters which require
unanimous approval by the Zerrenner Foundation, Braco and ECAP, as follows:

     o  any amendment to the by-laws of AmBev and/or any of its subsidiaries
        changing the corporate objectives, the term of duration of the
        company, and/or the composition, powers and duties of the management
        bodies;

     o  approval of the annual investment budget of AmBev and/or any of its
        subsidiaries;

     o  approval of AmBev's strategic five-year plan;

     o  appointment, removal or replacement of the Chief Executive Officer of
        AmBev;

     o  approval or change of the compensation policy for the board of
        directors and officers of AmBev and its subsidiaries;

     o  approval of stock option plans for the managers and employees of AmBev
        and/or its subsidiaries;

     o  change in the dividend policy of AmBev and/or any of its subsidiaries;

     o  increases in the capital of AmBev and/or any of its subsidiaries, with
        or without preemptive rights, through subscription, creation of a new
        class of shares, or changes in the characteristics of the existing
        shares, as well as decreases of capital, issuances of debentures
        (whether or not convertible into shares), warrants, and the creation
        of founders' shares by AmBev and/or any of its subsidiaries;

     o  mergers, spin-offs, transformations, acquisitions, and investments
        involving AmBev and/or any of its subsidiaries;

     o  the creation, acquisition, assignment, transfer, establishment of an
        encumbrance on and/or disposal of, shares, quotas and/or any
        securities issued by any of AmBev's subsidiaries, under any title or
        form;

     o  the incurrence by AmBev and/or any of its subsidiaries, in a single
        transaction or series of related transactions, of any indebtedness
        greater than 10% of the shareholders' equity of AmBev as per the last
        audited balance sheet prepared in accordance with Brazilian
        corporation law;

     o  the execution, amendment, termination, renewal or cancelation of any
        contracts, agreements or the like involving the registered or
        deposited trademarks of AmBev or its subsidiaries;

     o  the extension of loans or the offer of guarantees of any kind by AmBev
        and/or any of its Subsidiaries to any third parties in an amount
        greater than 1% of AmBev's shareholders' equity as set forth in the
        last audited balance sheet prepared in accordance with Brazilian
        corporation law, except in favor of employees of AmBev and of its
        subsidiaries, or in favor of the subsidiaries themselves;

     o  election of members for committees of AmBev's board of directors;

     o  cancellation of the registration of AmBev and/or any of its
        subsidiaries as publicly traded companies;

     o  petition for an arrangement with creditors (concordata) or
        acknowledgment of bankruptcy by AmBev and/or any of its subsidiaries;

     o  liquidation or dissolution of AmBev and/or any of its subsidiaries;
        and

     o  appointment of the external auditors of AmBev and/or any of its
        subsidiaries.


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<PAGE>


     The shareholders' agreement provides that whenever the parties fail to
reach a consensus in a preliminary meeting as to any matter listed above, they
will exercise their voting rights so as not to approve such matter. The
shareholders' agreement provides that any votes cast by the Zerrenner
Foundation, Braco or ECAP in violation of the provisions of the agreement will
be deemed null, void and ineffective.

     Rights of First Refusal

     The shareholders' agreement contains the following provisions concerning
rights of first refusal of the parties to the agreement:

     o  Neither the Zerrenner Foundation, on the one hand, nor Braco and ECAP,
        on the other hand, may directly or indirectly dispose of their AmBev
        shares without offering a right of first refusal to the other party.
        The right of first refusal can only be exercised so that all AmBev
        shares offered are acquired by the offered party and so that such
        acquisition occurs within a 30-day period, as provided in the
        shareholders' agreement. If the right of first refusal is not
        exercised, the party wishing to dispose of its AmBev shares may do so
        within 60 days, provided that the disposition is made on the same
        terms and at no less than the same price as offered to the other
        party;

     o  In the event that the shares of AmBev owned by the Zerrenner
        Foundation as one party, and Braco and ECAP as the other party, become
        subject to seizure, attachment, judicial surety or any other
        restrictive measure, and such restriction is not removed or waived
        within 30 days after its imposition, the shares subject to the
        restriction shall be automatically deemed offered for sale to the
        other party. This offer will remain open for 30 days, and the price
        for the AmBev shares will be the lesser of either the book value of
        the AmBev shares, as per the latest audited balance sheet of AmBev,
        prepared in accordance with Brazilian corporation law, or the average
        quoted market price of the AmBev shares on stock exchanges in the 20
        days prior to the removal or waiver of the imposition. If the
        obligations guaranteed by the restriction exceed the above price, the
        party whose shares have been subject to the restriction will be liable
        for the difference that the other party may be required to deposit in
        order to acquire the shares;

     o  If any of the Zerrenner Foundation, as one party, and Braco and ECAP,
        together as the other party, intends to dispose of subscription rights
        corresponding to AmBev shares that it holds, it must first offer such
        rights to the other party, who will then be required to exercise its
        right of first refusal to subscribe the new shares to be issued,
        within 10 days; and

     o  In the event of a proposed sale by Marcel Telles, Jorge Paulo Lemann
        or Carlos Alberto Sicupira of any voting shares of Braco or any voting
        shares of ECAP held by Braco, which would result in a change in
        control of either Braco or ECAP, the Zerrenner Foundation will have a
        right of first refusal to acquire all shares of Braco to be disposed
        of by the above Braco shareholders, or all shares of ECAP to be
        disposed of by Braco. The Zerrenner Foundation will have 30 days to
        exercise this right of first refusal.

     The shareholders' agreement provides that any transfer of shares or
subscription rights in which the provisions on rights of first refusal are not
observed will not be valid. AmBev's management is also prohibited from
reflecting any such transfer in the company's corporate books.


                                      85


<PAGE>


     Buy-Sell Rights

     The shareholders' agreement provides for buy-sell rights beginning 30
months after the date of execution of the agreement. The buy-sell provisions
create an obligation of either party to sell their AmBev shares or purchase
the AmBev shares of the other party, as the case may be. This two-way
obligation operates as follows:

     o  a party disagreeing on any matter with the other party has the right
        to notify the other party, and to state that it intends to purchase
        all the shares of the other party. In the notice, the dissenting party
        must state (a) the price per share to be paid, (b) the payment
        conditions, (c) the period for consummating the transaction, which
        cannot exceed 30 days, (d) the interest rate, and (e) the applicable
        inflation adjustment index. The dissenting party can establish all
        these conditions at its own discretion;

     o  the other party that receives the notice then has the option of (a)
        accepting the offer or (b) purchasing all the shares of the dissenting
        party on the same terms and conditions as notified by the dissenting
        party. The dissenting party will then have to accept whatever decision
        is made by the other party.

     The only exception to the compulsory purchase or sale of AmBev shares
under this provision relates to non-completion of the share transfers within
six months due to the need of the Zerrenner Foundation to obtain necessary
approvals, since the Zerrenner Foundation is subject to a number of
formalities and restrictions on the ability to sell assets, which are due to
its corporate nature. In such a case, the parties will submit the disagreement
to arbitration, to be conducted in accordance with the rules of the
International Chamber of Commerce - ICC. Except when otherwise agreed by the
dissenting party, the price of the AmBev shares must be payable in no more
than 12 monthly installments.

     Specific Performance

     Under Brazilian law, the obligations of the parties under the
shareholders' agreement will be subject to specific performance, as provided
for under Brazilian corporation law.


                                      86


<PAGE>


                          RELATED PARTY TRANSACTIONS

Material Related Party Transactions

     AmBev and its subsidiaries do not currently engage in any material
related party transactions.

Loans

     The Company finances its directors', senior managements' and employees'
purchases of shares pursuant to AmBev's Stock Ownership Plan. See "Item
6--Directors, Senior Management and Employees--Plans --Stock Ownership Plan".


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<PAGE>


Item 8.  Financial Information

       CONSOLIDATED FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION

Consolidated Financial Statements

     See "Item 18.  Financial Statements" and pages F-1 through F-101.

Export Sales

     Total exports of beer represented less than 1% of AmBev's total net sales
in 2000. Total exports of soft drinks represented less than 1% of AmBev's
revenues in 2000. For more information regarding AmBev's beer and soft drink
exports see "Item 4--Information on the Company--AmBev Business Overview--Our
Products and Brands".

Legal Proceedings

     Except as set forth below, there are no legal proceedings to which AmBev
or any of its subsidiaries are parties, or to which any of their respective
properties are subject which, either individually or in the aggregate, may
have a material adverse effect on the results of operations, liquidity or
financial condition of AmBev or any of its subsidiaries.

     Civil Claims

     On February 29, 2000, five former shareholders of Antarctica who had
exercised appraisal rights under the Antarctica conversion jointly filed a
lawsuit against AmBev and Antarctica in the 18th civil court of the City of
Sao Paulo. These former shareholders claim that the decision taken at the
Antarctica shareholders' meeting held on September 2, 1999 changing the
valuation method for determining the value of the Antarctica shares subject to
appraisal rights from the book value to economic value of such shares was
invalid, since it occurred after the plaintiffs had exercised their appraisal
rights. These plaintiffs claim compensation in the total amount of
approximately R$0.77 million (US$0.39 million based on the commercial market
rate on December 31, 2000).

     Prior to the decision of CADE approving the controlling shareholders'
contribution, we understand that a representative of the Brazilian Union of
Antarctica Distributors (ABRADISA) met with one of CADE's board members and
alleged that two attorneys had attempted to improperly influence other CADE
board members to vote against the Antarctica transaction. Allegedly, the CADE
board member, in turn, questioned whether the ABRADISA representative was
himself seeking to improperly influence CADE's board members against approving
the Antarctica transaction. Although we believe that the Federal authorities
have recommended that Brazil's attorney-general's office conduct a further
investigation of this matter, no wrongdoing by any party has been announced to
date. We have not been formally notified of these events, nor have we
participated in any stage of the inquiry.

     Tax Matters

     Brahma and Antarctica have filed claims against the Brazilian tax
authorities alleging that certain taxes are unconstitutional. The company has
either paid, or alternatively made provisions for, amounts due pursuant to
these claims. These legal tax proceedings include claims for income taxes, the
value-added tax (ICMS), the excise tax (IPI) and revenue taxes (PIS (Federal
unemployment insurance contribution) and COFINS (Federal social security
tax)). As these claims are contingent on obtaining favorable judicial
decisions, the corresponding assets which might arise in the future are only
recorded once it becomes certain that we will receive the amounts previously
paid or deposited.


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<PAGE>


     Income Tax and Social Contribution

     Beginning in 1997, an amendment to the tax law confirmed the
deductibility of interest attributable to shareholders' equity for social
contribution and income tax purposes. Brahma filed a lawsuit with the 22nd
Federal Court of Rio de Janeiro, requesting recovery of social contribution
taxes previously paid for the 1996 fiscal year in the amount of US$12.6
million. The Federal Court granted Brahma an injunction recognizing the
deductibility of payment of interest attributable to shareholders' equity and,
as a result, allowing the company to suspend the payment of social
contribution amounts owed in 1999 up to the amount not deducted in 1996,
thereby allowing Brahma to offset the amounts of taxes unduly paid in 1996
against the amounts owed in 1999. Brahma, however, never used the benefit
granted by said injunction, and in April of 2001, the Federal Court of Appeals
reversed the Federal Court's injunction. Brahma intends to appeal the Federal
Court of Appeal's judgment to the Brazilian Supreme Court and/or the Superior
Court of Justice.

     Value-Added Tax, Excise Tax and Taxes on Revenues

     In October 1996, a tax law allowed credits of ICMS on capital
expenditures to be offset against the amounts payable on such tax. Based on
this law and on some constitutional principles, some of our subsidiaries filed
several lawsuits with State Courts to allow them to offset ICMS tax paid prior
to 1996 and with Federal Courts regarding IPI excise tax paid in the 1997 and
1996 fiscal years against similar taxes payable. From 1998 to 2000 we have
offset a total of approximately US$38.6 million in relation to these taxes. A
provision has been made regarding the amounts offset, including the interest
and penalties that could become payable should we lose these lawsuits.

     In the first quarter of 1999, a new law came into effect requiring
Brazilian companies to pay PIS and COFINS not only on sales and services
revenues, but also on financial revenues. We, however, have not been paying
PIS and COFINS as required by the new law, as we have obtained injunctions
permitting the nonpayment of these additional taxes on the basis that the new
law is unconstitutional. As such new taxes remain in force until a final
ruling is rendered, we have made provisions in the amount of US$39.2 million.
We will not be permanently relieved of the obligation to pay such taxes unless
and until a final favorable ruling is rendered.

     AmBev is also discussing the PIS contribution due prior to 1995. The PIS
contribution charge, as established in Decree Laws Nos. 2.445 and 2.449 of
1988, was declared unconstitutional by the Brazilian Supreme Court in 1995,
which also held that all legal entities were entitled to recover the portion
of PIS improperly charged in connection with such legislation in excess of the
amount chargeable under Complementary law No. 7/70, the predecessor
legislation. Although the Supreme Court decision has guaranteed legal entities
the right to the PIS recovery, it has not yet determined how the credits are
to be calculated. Therefore, the tax calculation basis, the calculation
procedure and the interpretation of Complementary law No. 7/70 are the major
remaining issues. The tax authorities are litigating these issues and disagree
with the amount of credits to be recovered by AmBev. A provision of US$35.4
million has been made in relation to the credits already used by the company.

     Distributors and Product-Related Claims

     As of December 31, 2000, 270 breach of contract claims had been filed
against Brahma by former distributors of Brahma whose contracts were
terminated due to low sales volume, failure by distributors to meet Brahma
guidelines and a general rationalization of the distribution network. Most of
these claims were originally filed between 1996 through 2000. Of these claims,
240 are still in the lower level (individual judges), 27 have been appealed
and are now in intermediate court levels, and 3 claims are currently being
reviewed by the highest level appellate court in Brazil, the Supreme Court of
Justice (STJ). The aggregate amount of these claims may exceed US$40 million.
Brahma has made a provision of US$14.5 million in regard to such claims, based
on advice of outside legal counsel. AmBev intends to continue a program of
increasing its percentage of direct distribution and, in areas where it
continues to


                                      89


<PAGE>


use third-party distributors, may terminate existing distributors in favor of
new distributors. We expect this program to result in additional lawsuits.

     There are currently 12 administrative proceedings against Brahma under
CADE's review, each of them commenced by former or present distributors who
challenge the legality of market practices of Brahma under distribution
arrangements and request the suspension of such market practices. CADE has
denied ten of these requests by determining that Brahma did not engage in any
of the alleged illegal activities. The remaining two proceedings are still
being analyzed by CADE.

     Antitrust Matters

     There are currently two antitrust proceedings pending against AmBev. Both
were commenced by CADE following its investigations in connection with the
combination. The first action concerns alleged tying arrangements whereby
AmBev allegedly required its retailers to purchase certain of its soft drink
products in combination with their purchases of certain AmBev beer products.
The second action refers to some complaints brought by some of AmBev's past
and current distributors who allege that provisions in our distribution
agreements are illegally restrictive exclusivity provisions. According to
applicable legislation, fines of up to 30% of AmBev's gross revenue in the
previous fiscal year may be levied.

     Brahma's joint ventures with Miller and Industrias Gessy Lever Ltda., its
franchise agreement with PepsiCo and Skol's licensing agreement with Carlsberg
were all required to be submitted to CADE for approval (see "Item
4--Information on the Company--AmBev Business Overview--Our Products and
Brands--Joint Ventures and Strategic Alliances").

     In June 1997, CADE rejected Brahma's joint venture with Miller Brewing
Company, requiring Brahma to terminate the venture within two years. Brahma
and Miller appealed the ruling and, in May 1998, CADE approved the joint
venture with Miller subject to certain conditions. Accordingly, in August of
1998, Brahma, Miller and CADE signed an agreement under which Brahma agreed
to:

     o  make a public offer to bottle beer for third-party companies. Only
        companies that had less than 10% of total beer sales were eligible to
        participate in the offering;

     o  make a public offer of technical assistance for micro-breweries,
        defined as those companies that produce and sell beer solely in their
        own facilities; and

     o  amend the agreement with Miller so as to delete references to product
        prices.

     In October 1998, CADE approved the franchise agreement with PepsiCo
International, Inc. In early 1999, CADE approved Brahma's joint venture with
Industrias Gessy Lever Ltda., which resulted in the creation of Ice Tea do
Brasil Ltda. Also in 1999, the Skol licensing arrangement with Carlsberg A/S
was approved by CADE.

     CADE is currently reviewing the cooperation of AmBev with Souza Cruz S.A.
for the implementation of a business-to-business website by means of which the
acquisition of MRO (materials, repairs and operation) products and services
will be negotiated. Such association was commenced on November 30, 2000, and
CADE has yet to render a decision.

     Labor Matters

     AmBev is involved in approximately 8,000 legal proceedings with former
and current employees, mainly relating to dismissals, severance, overtime,
dangerous work and health premiums, supplementary retirement benefits and
other matters, all of which are awaiting judicial resolution. AmBev has
established provisions in the amount of US$40.0 million as of December 31,
2000, in connection with all labor proceedings in which AmBev believes there
is a probable chance of loss. In Brazil, it is not unusual for a company to be
a defendant in a large number of labor claims.


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<PAGE>


     In compliance with CADE's decision approving the controlling
shareholders' contribution and the performance agreement that AmBev entered
into with CADE, any dismissals must be made in accordance with the
restrictions imposed by the decision. See "The Combination and Brazilian
Antitrust Approval--Brazilian Antitrust Approval". AmBev is involved in some
lawsuits filed by dismissed employees claiming reinstatement in view of the
CADE decision.

     Environmental Matters

     The operational license of our industrial plant located in Lages, state
of Santa Catarina, is currently pending, because the state environmental
agency conditioned its renewal, and the concession of any new license, on the
relocation of a public water collecting station used to supply water to the
city. Although we have signed an agreement with the state of Santa Catarina
and the Municipality of Lages, which provided that the state of Santa Catarina
would be responsible for relocating the water collecting station, such
relocation has not yet occurred. This agreement is also being challenged in
court by the State of Santa Catarina District Attorney, acting in place of the
environmental foundation that initially filed the suit. As part of that claim,
a preliminary decision by the court has determined that we must abstain from
disposing of industrial effluent without proper treatment in the river. As of
the date of this annual report, we are treating our effluent in compliance
with the court's preliminary decision. In order to comply with requests of the
environmental agency, we have constructed a seven kilometer sewer line to
dispose of industrial effluent at a point below the water collection station.
This line began Operations in April of 2001, and is still awaiting an
operational license. We believe that once this license has been granted, the
operational license for the plant will be renewed and the lawsuit will be
dismissed.

     The operational license of our plant located in Aquiraz, State of Ceara,
is also currently under suspension pending the satisfaction of certain
obligations pursuant to an Environmental Agreement signed between The
Environmental Agency of the State of Ceara and Bebidas Antarctica do
Norte-Nordeste on February 14, 2001, which stipulates obligations (including
certain compensatory measures related to the Environmental Impact Assessment)
that AmBev must fulfill. An Environmental Impact Assessment is often required
as a part of the environmental licensing process and includes a broad study of
the positive and negative impacts of a project's construction and subsequent
operation. The Environmental Impact Assessment is designed to serve as a
technical-scientific instrument capable of helping the Environmental Agency in
deciding whether a particular project is feasible or not, and if mitigation or
compensatory measures may be required. Some measures that AmBev should have
taken pursuant to the Environmental Impact Assessment conducted on our plant
located in Aquiraz had not been completely fulfilled prior to us entering into
the Environmental Agreement mentioned above. If we fail to comply with any of
the terms of the Environmental Agreement, we will not be able to renew the
operational license for our Aquiraz plant. However, we believe that our
obligations under the Environmental Agreement have already been fulfilled, and
we therefore expect the Environmental Agency to issue the Aquiraz operational
license in the near future.

     The continuing operation of both plants Lages and Aquiraz, without a
license, may subject us to fines of up to US$5.7 million, in addition to total
or partial suspension of activities, and civil and criminal sanctions.


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<PAGE>


     CVM Investigation

     In April 2000, an Inquiry Commission (Comissao de Inquerito) of the
Brazilian Securities Commission (the "CVM") initiated an administrative
proceeding in which the CVM alleges that certain shareholders, members of the
Board of Directors and officers of Brahma and Antarctica violated CVM rules
relating to insider trading at the time of the incorporation of AmBev by
making use of privileged information about the transaction to acquire stock
purchase warrants (bonus de subscricao) of Brahma and shares of Brahma and
Antarctica. Each of the involved parties has denied violating CVM rules. If
the CVM rules that violations occurred, sanctions could include reprimands,
fines or decrees temporarily barring the individuals found guilty from acting
as officers or directors of AmBev. Any decision of the CVM is subject to
administrative appeal and/or to judicial review.

Dividend Policy

     For information regarding our dividend policy, see "Item 3--Selected
Financial Data--Dividends--Dividend Policy".

Significant Changes

     Except as otherwise described in our annual financial statements, there
has been no significant changes in our business, financial conditions or
results since December 31, 2000.


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<PAGE>


Item 9.   The Offer and Listing

             PRINCIPAL MARKET AND TRADING MARKET PRICE INFORMATION

         AmBev is registered as a publicly held company with the CVM and has
been listed on the Brazilian stock exchanges since December 17, 1998, under
the name of Aditus Participacoes S.A. Because AmBev was originally
incorporated as a shelf company without any operational activity, there was no
market for AmBev shares until September 17, 1999, two business days after the
Antarctica conversion. From September 17, 1999 until September 15, 2000, the
first date following the Brahma conversion, there was a limited trading market
for AmBev shares. For a description of the combination transactions that led
to the formation of AmBev, including the Antarctica and Brahma conversions,
see "The Combination and Antitrust Approval". AmBev shares are quoted on the
Sao Paulo Stock Exchange under the symbols "AMBV3" (common shares) and "AMBV4"
(preferred shares). Until April 28, 2000, the AmBev shares were traded in the
Rio de Janeiro Stock Exchange and other Brazilian stock exchanges under the
symbols "AMBVON" (common shares) and "AMBVPN" (preferred shares).

         On October 20, 2000, the shareholders of AmBev present at an
extraordinary general meeting unanimously approved a five-for-one stock split
of the company's outstanding common and preferred shares. See Note 16(a)(ii)
in the Consolidated Financial Statements.


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<PAGE>


Shares

         The table below shows the quoted high and low closing sales prices in
reais on the Sao Paulo Stock Exchange for AmBev's preferred and common shares
for the indicated periods on and after September 17, 2000. All prices quoted
below relating to periods prior to September 14, 2000, relate to high and low
closing sales prices in reais on the Sao Paulo Stock Exchange for preferred
and common shares of Brahma, AmBev's predecessor. All share prices, including
prices relating to Brahma preferred and common shares, have been restated to
reflect AmBev's five-for-one stock split described in the preceding paragraph.

     Trading Prices on the Sao Paulo Stock Exchange: Preferred Shares (1)
       -----------------------------------------------------------------


                                               Per 1000 Preferred Shares
                                               -------------------------
                                                High                Low
                                                ----                ---
Annual                                                 (in Reais)
------

2000..........................................  R$ 488           R$ 208
1999 .........................................     272               92
1998..........................................     176               78
1997..........................................     170              112
1996..........................................     131               82


Quarterly
---------
2000

     First Quarter............................  R$ 278           R$ 208
     Second Quarter...........................     306              220
     Third Quarter prior to September 14......     390              307
     Third Quarter from September 17..........     408              388
     Fourth Quarter...........................     488              374

1999
     First Quarter............................  R$ 174           R$  92
     Second Quarter...........................     199              155
     Third Quarter............................     240              193
     Fourth Quarter...........................     272              216

Monthly
-------
2001

     January..................................  R$ 559           R$ 458
     February.................................     558              496
     March....................................     529              495
     April....................................     540              473
     May......................................     581              510
     June (through 22)........................     550              473
-------------------

Source:  Bloomberg

     (1) For a period of time commencing on September 17, 1999, two business
     days after the Antarctica conversion, and prior to September 15, 2000,
     the first date following the Brahma conversion, there did exist two
     separate trading markets for the shares of AmBev and Brahma, AmBev's
     predecessor. Due to the limited trading volume in AmBev's shares
     throughout this period, however, this chart only relates to the stock
     prices of Brahma shares for the period of time commencing on September
     17, 1999 and prior to September 15, 2000.


                                      94


<PAGE>


       Trading Prices on the Sao Paulo Stock Exchange: Common Shares (1)
        --------------------------------------------------------------


                                                      Per 1000 Common Shares
                                                     -----------------------
                                                     High                 Low
                                                     ----                 ---
Annual                                                      (in Reais)
------
2000...............................................  R$ 470             R$ 158
1999 ..............................................     190                 92
1998...............................................     160                 77
1997...............................................     171                111
1996...............................................     132                 82

Quarterly
---------
2000

     First Quarter.................................  R$ 186             R$ 158
     Second Quarter................................     233                180
     Third Quarter prior to September 14...........     302                236
     Third Quarter from September 17...............     312                294
     Fourth Quarter................................     470                312

1999
     First Quarter.................................  R$ 131             R$  92
     Second Quarter................................     140                120
     Third Quarter ................................     169                150
     Fourth Quarter................................     190                158

Monthly
-------
2001
     January.......................................  R$ 520             R$ 445
     February......................................     540                465
     March.........................................     522                482
     April.........................................     520                470
     May...........................................     525                500
     June  (through 22)............................     530                465
--------------

Source:  Bloomberg

     (1) For a period of time commencing on September 17, 1999, two business
     days after the Antarctica conversion, and prior to September 15, 2000,
     the first date following the Brahma conversion, there did exist two
     separate trading markets for the shares of AmBev and Brahma, AmBev's
     predecessor. Due to the limited trading volume in AmBev's shares
     throughout this period, however, this chart only relates to the stock
     prices of Brahma shares for the period of time commencing on September
     17, 1999 and prior to September 15, 2000.


                                      95


<PAGE>


ADRs

     AmBev has registered two classes of American Depositary Shares (ADSs)
pursuant to the Securities Exchange Act: ADSs evidenced by American Depositary
Receipts (ADRs) representing 100 preferred shares, and ADSs evidenced by ADRs
representing 100 common shares. The ADSs have been listed on the New York
Stock Exchange since September 15, 2000 and trade under the symbols "ABV.c"
(ADSs representing AmBev common shares) and "ABV" (ADSs representing AmBev
preferred shares). On October 20, 2000, the shareholders present at an
extraordinary general meeting unanimously approved a five-for-one stock split
of the company's outstanding common and preferred shares. However, AmBev's
ADSs were not split. Prior to the stock split, each ADS represented 20 common
or preferred shares of AmBev. Since the stock split did not affect AmBev's
ADSs, after the stock split each ADS represented 100 common or preferred
shares of AmBev. Consequently, the stock split did not have a significant
impact on the price of our ADRs.

     As of April 10, 2001 there were 20 registered holders of our preferred
ADSs, with approximately 99.9% of the preferred ADSs registered in the name of
The Depository Trust Company. As of April 10, 2001, there were 8 registered
holders of the common ADSs, with approximately 99.9% of the ADSs registered in
the name of The Depository Trust Company. To our knowledge, at April 10, 2001,
the number of our common shares held in the United States (either directly or
in the form of ADRs) was approximately 9,060,000 and the number of our
preferred shares held in the United States (either directly or in the form of
ADRs) was approximately 9,436,426,500.

     The information presented in the table below represents, for the
indicated periods on and after September 15, 2000, the reported high and low
closing sales prices of AmBev ADRs quoted in U.S. dollars on the New York
Stock Exchange. All prices quoted below relating to periods prior to September
15, 2000, relate to the reported high and low closing sales prices of the ADRs
of Brahma, AmBev's predecessor, quoted in dollars on the New York Stock
Exchange.


                                      96


<PAGE>


                Trading Prices on the New York Stock Exchange:
                ----------------------------------------------
                  ADRs Representing 100 Preferred Shares (1)
                  ------------------------------------------

                                                   Per 100 Preferred Share ADRs
                                                   ----------------------------
                                                     High                Low
                                                     ----                ---
Annual                                                       (in US$)
------
2000.............................................   US$ 25.50        US$ 11.81
1999.............................................       14.50             7.00
1998.............................................       15.56             6.63
1997.............................................       16.00            10.87

Quarterly
---------
2000
     First Quarter...............................   US$ 16.25        US$ 12.13
     Second Quarter..............................       17.00            11.81
     Third Quarter prior to September 14, 2000...       21.19            17.00
     Third Quarter from September 17, 2000.......       22.13            21.25
     Fourth Quarter..............................       25.50            19.75

1999
     First Quarter...............................  US$   9.31       US$   7.00
     Second Quarter..............................       11.75             9.06
     Third Quarter...............................       13.50            10.00
     Fourth Quarter..............................       14.50            10.88

Monthly
-------
2001
     January.....................................   US$ 28.70        US$ 23.38
     February....................................       28.10            24.60
     March.......................................       25.25            23.10
     April.......................................       24.62            21.10
     May.........................................       25.47            22.00
     June (through 22)...........................       23.30            19.27

---------------
Source: Bloomberg


                                      97


<PAGE>


                Trading Prices on the New York Stock Exchange:
                ----------------------------------------------
                     ADRs representing 100 Common Shares
                     -----------------------------------

                                                   Per 100 Common Share ADRs
                                                   -------------------------
                                                    High                Low
                                                    ----                ---
Annual                                                      (in US$)
------
2000..............................................  US$  19.88       US$   9.00
1999..............................................       10.25             7.31
1998..............................................       13.75             6.63
1997..............................................       16.00            10.50

Quarterly
---------
2000
     First Quarter................................  US$  10.19       US$   9.00
     Second Quarter...............................       12.13             9.69
     Third Quarter prior to September 14, 2000....       16.00            10.63
     Third Quarter from September 17, 2000........       15.00            15.00
     Fourth Quarter...............................       19.88            14.50

1999
     First Quarter................................ US$    8.63       US$   7.31
     Second Quarter...............................        9.00             7.75
     Third Quarter................................        9.75             8.03
     Fourth Quarter...............................       10.25             8.16

Monthly
-------
2001
     January......................................  US$  24.00        US$ 19.50
     February.....................................       27.50            23.38
     March........................................       27.00            22.50
     April........................................       24.00            21.75
     May..........................................       22.80            20.00
     June (through 22) *..........................        -                -
-------------------

Source:  Bloomberg
*No trading activity was reported during this period.


                                      98


<PAGE>


                 REGULATION OF THE BRAZILIAN SECURITIES MARKET

     The Brazilian securities markets are regulated by the CVM, which has
general authority over the stock exchanges and securities markets, as well as
by the Central Bank, which has, among other powers, licensing authority over
brokerage firms and regulates foreign investment and foreign exchange
transactions. The Brazilian securities markets are governed by Law No. 6,385
dated December 7, 1976, as amended and supplemented (the "Brazilian Securities
Law"), by Law No. 6,404 fo December 15, 1976, as amended and supplemented (the
"Brazilian corporation law") and by regulations issued by the CVM, the
Conselho Monetario Nacional (National Monetary Council) and the Central Bank.
These laws and regulations, among others, provide for disclosure requirements,
restrictions on insider trading and price manipulation, and protection of
minority shareholders. They also provide for licensing and oversight of
brokerage firms and governance of Brazilian stock exchanges. However, the
Brazilian securities markets are not as highly regulated and supervised as
U.S. securities markets.

     Under the Brazilian corporation law, a company is either publicly held
(listed), a companhia aberta, such as AmBev, whose shares are publicly traded
on the Sao Paulo Stock Exchange (Bovespa), or privately held (unlisted), a
companhia fechada. All listed companies are registered with the CVM and are
subject to reporting and regulatory requirements. A company registered with
the CVM may trade its securities either on the Brazilian stock exchanges or in
the Brazilian over-the-counter market. Shares of companies like AmBev traded
on the Sao Paulo Stock Exchange may not also be traded on the Brazilian
over-the-counter market. The shares of a listed company, including AmBev, may
also be traded privately subject to limitations. To be listed on the Sao Paulo
Stock Exchange a company must apply for registration with the CVM and the
stock exchange where the head office of the company is located.

     The trading of securities on the Brazilian stock exchanges may be halted
at the request of a company in anticipation of a material announcement.
Trading may also be suspended on the initiative of a Brazilian stock exchange
or the CVM, among other reasons, based on or due to a belief that a company
has provided inadequate information regarding a significant event or has
provided inadequate responses to inquiries by the CVM or a stock exchange.

Trading on the Brazilian Stock Exchanges

     On January 27, 2000, a formal protocol was signed merging the previous
nine Brazilian stock exchanges. Following the merger, the Sao Paulo Stock
Exchange is the only Brazilian stock exchange on which private equity and
private debt may be traded. The Sao Paulo Stock Exchange is a not-for-profit
entity owned by its member brokerage firms. Trading on the Sao Paulo Stock
Exchange is limited to member brokerage firms and a limited number of
authorized non-members. The Sao Paulo Stock Exchange has two open outcry
trading sessions each day, one from 10:00 a.m. to 1:00 p.m., and one from 2:00
p.m. to 4:45 p.m., subject to change during daylight savings time in the
United States. Trading is also conducted between 10:00 a.m. and 5:00 p.m.
(subject to change during daylight savings time in the United States) on the
Computer Assisted Trading System (CATS) on the Sao Paulo Stock Exchange and on
the National Electronic Trading System (SENN). The Sao Paulo Stock Exchange
also permits trading from 6:00 p.m. to 10:00 p.m. on an on-line system
connected to traditional and Internet brokers called the After Market. Trading
on the After Market is subject to regulatory limits on price volatility and on
the volume of shares transacted through Internet brokers. CVM has
discretionary authority to suspend trading in shares of a particular issuer
under specific circumstances. Securities listed on the Sao Paulo Stock
Exchange may also be traded off the exchange under specific circumstances, but
such trading is very limited.

     Settlement of transactions is effected three business days after the
trade date. Delivery of and payment for shares are made through the facilities
of separate clearing houses for each exchange, which maintain accounts for the
member brokerage firms. The seller is ordinarily required to deliver the
shares to the exchange on the second business day following the trade date.
The clearing house for the Sao


                                      99


<PAGE>


Paulo Stock Exchange is Companhia Brasileira de Liquidacao e Custodia (CBLC),
which is owned by the Sao Paulo Stock Exchange and its members.

     In order to better control volatility, the Sao Paulo Stock Exchange has
adopted a "circuit breaker" mechanism pursuant to which trading sessions may
be suspended for a period of 30 minutes or one hour whenever the index of the
stock exchange downwards 10%.

     Although the Brazilian equity market is Latin America's largest in terms
of market capitalization, it is smaller, more volatile and less liquid than
the major U.S. and European securities markets. At December 31, 2000, the
aggregate market capitalization of all the companies listed on Sao Paulo Stock
Exchange was equivalent to approximately US$225.5 billion, and the 10 largest
companies, which included AmBev represented approximately 44% of the total
market capitalization of all listed companies. Although all of the outstanding
shares of a listed company are actually available for trading by the public,
in most cases fewer than half of the listed shares are actually traded by the
public because the remainder of a listed company's shares are usually held by
small groups of controlling persons, by governmental entities or by one
principal shareholder. For this reason, data showing the total market
capitalization of Brazilian stock exchanges tend to overstate the liquidity of
the Brazilian equity securities market.

     There is also significantly greater concentration in the Brazilian
securities markets. During the year ended December 31, 2000, the five most
actively traded issues represented approximately 47.07% of the total volume of
shares traded on the Sao Paulo Stock Exchange.

     Trading on Brazilian stock exchanges by nonresidents of Brazil is subject
to limitations under Brazilian foreign investment legislation. See "Item
3--Key Information--Exchange Rate Information--Exchange Controls" and "Item
10--Additional Information--Memorandum and Articles of
Association--Restrictions on Foreign Investment".


                                      100


<PAGE>


Item 10.   Additional Information

                    MEMORANDUM AND ARTICLES OF ASSOCIATION

     Set forth below is a brief summary of the material provisions concerning
our preferred shares, common shares, by-laws and the Brazilian corporation
law. In Brazil, the principal governing document of a corporation is the
company's by-laws (Estatuto Social). This description is qualified in its
entirety by reference to the Brazilian corporation law and our by-laws. An
English translation of our by-laws has been filed with the Securities and
Exchange Commission of the United States (SEC) as an annex to our prospectus
filed as part of the Form F-4 filed by us on August 29, 2000, as amended on
April 27, 2001 (the amendments to the by-laws are incorporated by reference to
the Form 6-K filed by AmBev on May 30, 2001). A copy of our by-laws (together
with an English translation) is also available for inspection at the principal
office of the Depositary. Information on the trading market for our preferred
shares is set forth under "Item 9--The Offer and Listing-Principal Market and
Trading Market Price Information" and information on ownership of our shares
is set forth under "Item 7--Major Shareholders and Related Party
Transactions--Major Shareholders".

     Our capital stock is comprised of preferred shares and common shares, all
without par value. At April 10, 2001, there were 23,238,852,050 preferred
shares outstanding and 15,976,336,195 common shares outstanding.

     Our preferred shares are nonvoting except under limited circumstances and
are entitled to priority over our common shares in the case of liquidation.
See "--Voting Rights", for more information regarding the voting rights of our
preferred shares.

     Under the Brazilian corporation law, the number of nonvoting shares or
shares with limited voting rights, such as our preferred shares, may not
exceed two-thirds of the total number of shares.

     The majority of members of our Board of Directors will be elected by the
controlling shareholders of our common shares. Board members, even if elected
by one specific shareholder, owe fiduciary duties towards our Company and all
of our shareholders.

General

     Our registered name is Companhia de Bebidas das Americas - AmBev and our
registered office is in Sao Paulo. Our registration number with the Brazilian
Commercial Registry is 35300157770. AmBev's principal corporate purposes
include the production and sale of beer, soft drinks and other beverages. A
more detailed description of AmBev's purposes can be found in Chapter I,
Article 3 of AmBev's by- laws.

Board of Directors

     According to the Brazilian corporation law any matters subject to the
approval of the Board of Directors can be approved by a "simple majority" of
votes of the members present at the meeting. The same rules apply pursuant to
AmBev's by-laws.

     Pursuant to AmBev's by-laws any matters requiring the approval of the
Board of Directors will be approved by the affirmative vote of a majority of
its Board members present at the relevant meeting.

     In matters that a director may have a conflict, the Brazilian corporation
law sets forth that such director must disclose to the entire Board his/her
interest in the matter and abstain from voting. Any transaction that a
director may have an interest in can only be approved if carried out on an
arm's-length basis.

     The by-laws and the Brazilian corporation law require that our directors
be shareholders of the Company. Ownership of one share is sufficient to
satisfy this condition.


                                      101


<PAGE>


Reserves and Dividends

     The discussion below summarizes the main provisions of Brazilian
corporation law regarding the establishment of reserves by corporations and
rules with respect to the distribution of dividends, including provisions
regarding the interest charge attributed to shareholders' equity. Because
dividends payable by AmBev to its shareholders will derive primarily from the
dividends it receives from CBB and its subsidiaries, the discussion below
contains information with regard to both AmBev and CBB, in addition to generic
provisions under Brazilian corporation law.

     Calculation of Distributable Amounts

     At each annual shareholders' meeting, the board of directors is required
to propose how the company's earnings for the preceding fiscal year are to be
allocated. For purposes of Brazilian corporation law, a company's net income
after income taxes and social contribution taxes for such fiscal year, net of
any accumulated losses from prior fiscal years and amounts allocated to
employees' and management's participation in earnings represents its "income"
for such fiscal year. In accordance with Brazilian corporation law, an amount
equal to the company's "income", as adjusted (the "adjusted income", which we
will refer to as the "distributable amount") will be available for
distribution to shareholders in any particular year. Such distributable amount
will be affected by the following:

     o  reduced by amounts allocated to the social reserve, if any;

     o  reduced by amounts allocated to the statutory (legal) reserve;

     o  reduced by amounts allocated to the contingency reserve and unrealized
        income reserve established by the company in compliance with
        applicable law (as discussed below); and

     o  increased by reversals of reserves constituted in prior years.

     Social Reserve. AmBev's by-laws provide that it may set aside up to 10%
of its "income" for payments to foundations (such as the Zerrenner Foundation)
which provide welfare benefits to AmBev's employees and associates.

     Statutory (Legal) Reserve. Under Brazilian corporation law, corporations
(such as AmBev and CBB) are required to maintain a "legal reserve" to which
they must allocate 5% of their "income" for each fiscal year until the amount
of the reserve equals 20% of their paid-in capital. Accumulated losses, if
any, may be charged against the legal reserve. Other than that, the legal
reserve can only be used to increase the company's capital.

     Discretionary Reserves. Under Brazilian corporation law, a corporation
may also provide for discretionary allocations of "income" to the extent set
forth in its by-laws (collectively referred to as "discretionary reserves").
AmBev's and CBB's current by-laws provide for a discretionary reserve account
for investment, with the purpose of financing the expansion of each company's
business, which can be done through capital increases and the creation of new
enterprises, among other means. AmBev or CBB, as the case may be, must
allocate at least 5% and no more than 68.9% of its annual "income" to this
reserve, and the reserve cannot exceed 80% of the company's paid-in capital.
There can be no assurance that the by-laws of AmBev or CBB will not be amended
in the future.

     Contingency Reserve. Under Brazilian corporation law, a corporation may
at its discretion allocate a portion of its "income" to a "contingency
reserve" for an anticipated loss that is deemed probable in future years. Any
amount so allocated in a prior year must either be reversed in the fiscal year
in which the loss was anticipated if such loss does not in fact occur or be
charged off in the event that the anticipated loss occurs.

     Reserve for Investment Projects. Under Brazilian corporation law, a
portion of a corporation's "income" may be allocated for discretionary
appropriations for plant expansion and other fixed or working capital
investment projects, the amount of which is based on a capital budget
previously


                                      102


<PAGE>


presented by management and approved by shareholders. After completion of the
relevant capital projects, the company may retain the appropriation until a
shareholder vote to transfer all or a portion of the reserve to capital or
retained earnings.

     Unrealized Income Reserve. The "unrealized income" in any particular year
represents the sum of the net credit balance from the:

     o  price-level restatement of some balance sheet accounts (through 1995)
        in such year;

     o  share of equity earnings of subsidiary and associated companies in
        such year not yet distributed in the form of dividends; and

     o  profits from installment sales to be received after the end of the
        next succeeding fiscal year.

     Under Brazilian corporation law, the amount of "unrealized income" may be
allocated to an "unrealized income reserve" for any particular year in the
amount by which it exceeds the sum allocated to:

     o  the legal reserve;

     o  the discretionary reserves;

     o  the contingency reserve; and

     o  the reserve for investment projects in such year.

     Tax Incentive Reserve. Under Brazilian tax laws, a portion of "income"
may also be allocated to a general "tax incentive reserve" in amounts
corresponding to reductions in the company's income tax generated by credits
for particular government-approved investments. The reserve is available only
in connection with the acquisition of capital stock of companies undertaking
specific government-approved projects.

     Brazilian corporation law provides that all discretionary allocations of
"income", including the discretionary reserves, the unrealized income reserve
and the reserve for investment projects are subject to approval by the
shareholders voting at the annual meeting and may be transferred to capital or
used for the payment of dividends in subsequent years. The tax incentive
reserve and the legal reserve are also subject to approval by the shareholders
voting at the annual meeting and may be transferred to capital or used to
absorb losses, but are not available for the payment of dividends in
subsequent years.

     The calculation of "income" and allocations to reserves of AmBev and
Antarctica (now CBB) for any fiscal year are determined on the basis of
financial statements prepared in accordance with accounting principles set
forth by Brazilian corporation law, which differ from financial statements
prepared under U.S. GAAP. Some financial statements of AmBev and Antarctica
included in or incorporated by reference into this annual report have been
prepared in accordance with U.S. GAAP and, although Brahma's, Antarctica's and
AmBev's historical appropriations to reserves and dividends will be reflected
in such financial statements, investors will not be able to calculate such
allocations or required dividend amounts from those financial statements.

     Mandatory Dividend

     Under their by-laws, AmBev and CBB are required to distribute to
shareholders as dividends in respect to each fiscal year ending on December 31
an amount not less than 27.5%, respectively, of the distributable amount (the
mandatory dividend). In addition to the mandatory dividend, the board of
directors may recommend payment of dividends to the shareholders from other
funds legally available. Any payment of interim dividends or payment of
interest attributable to shareholders' equity will be netted against the
amount of the mandatory dividend for that fiscal year.


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     Under Brazilian corporation law, the mandatory dividend must be paid in
every fiscal year. However, the mandatory dividend need not be paid in any
fiscal year in which the board of directors and executive officers advise the
shareholders at the annual shareholders' meeting that payment of the mandatory
dividend would be incompatible with the company's financial situation. While
the law does not establish the circumstances in which payment of the mandatory
dividend would be "incompatible" with the company's financial situation, it is
generally agreed that a company need not pay the mandatory dividend if such
payment threatens the existence of the company as a going concern or harms its
normal course of operations. Nonpayment of the mandatory dividend must be
approved by the company's fiscal committee (Conselho Fiscal). In the case of
publicly held corporations, its management must submit an annual report
setting out the reasons for nonpayment of the mandatory dividend to its
shareholders and the CVM. If the mandatory dividend is not paid and funds are
available, those funds must be deposited in a special reserve account. If
amounts credited to this reserve are not absorbed by losses incurred in
subsequent fiscal years, they must be paid out in dividends as soon as this is
compatible with the financial situation of the company.

     Dividend Preference of Preferred Shares

     Pursuant to AmBev's by-laws, if any, the preferred shareholders of AmBev
are entitled to dividends 10% greater than the dividends to be paid to its
common shareholders.

     Payment of Dividends

     AmBev is required by Brazilian corporation law to hold an annual
shareholders' meeting by no later than April 30 of each year, at which time an
annual dividend may be declared. Additionally, interim dividends may be
declared by the board of directors. Any holder of record of shares at the time
of a dividend declaration is entitled to receive dividends. Under Brazilian
corporation law, dividends are generally required to be paid to the holder of
record on a dividend declaration date within 60 days following the date the
dividend was declared, unless a shareholders' resolution sets forth another
date of payment, which, in either case, must occur prior to the end of the
fiscal year in which such dividend was declared. AmBev's by-laws do not
provide for a time frame for payment of dividends. The mandatory dividend is
satisfied through payments made in the form of dividends and interest
attributable to shareholders' equity, which is equivalent to a dividend but is
a more tax efficient way to distribute earnings from the companies'
perspective, as it is generally deductible for income tax purposes. Any holder
of record of shares at the time of a dividend declaration is entitled to
receive dividends. A shareholder has a three-year period from the dividend
payment date to claim dividends in respect of its shares, after which the
company has no liability for such payment.

     Payments to ADS holders. Dividends paid to shareholders that are not
Brazilian residents, including holders of our American Depositary Shares
(ADSs), are exempt from Brazilian withholding tax with respect to profits
accrued as from January 1, 1996. Shareholders who are not residents of Brazil
must register their investment with the Central Bank in order for dividends,
sales proceeds or other amounts to be eligible for remittance in foreign
currency outside of Brazil. The preferred and common shares underlying our
ADSs are held in Brazil by the custodian (Banco Itau S.A.), as agent for the
depositary (The Bank of New York), which is the registered owner of AmBev
shares. Payments of cash dividends and distributions, if any, on AmBev common
and preferred shares will be made in Brazilian reais to the custodian on
behalf of The Bank of New York, which will then convert such proceeds into
U.S. dollars and will deliver such U.S. dollars to The Bank of New York for
distribution to the holders of AmBev ADSs. In the event that the custodian is
unable to immediately convert the real dividends into U.S. dollars, holders of
the preferred and common AmBev ADSs may be adversely affected by devaluations
or other exchange rate fluctuations before such dividends can be converted and
remitted. Fluctuations in the exchange rate between the real and the U.S.
dollar may also affect the U.S. dollar equivalent of the reais price of the
preferred and common shares of AmBev on the Brazilian stock exchanges.


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Interest Attributable to Shareholders' Equity

     Pursuant to a change in Brazilian tax law effective January 1, 1996,
Brazilian companies are permitted to pay limited amounts to shareholders of
equity securities and treat such payments as an expense for Brazilian income
tax purposes and, beginning in 1998, for social contribution purposes. The
purpose of the tax law change is to encourage the use of equity investment, as
opposed to debt, to finance corporate activities. The amount of any such
notional "interest" payment to holders of equity securities is generally
limited in respect of any particular year to the greater of (a) 50% of
retained earnings for such year or (b) 50% of pre-tax profits for such year
multiplied by the Taxa de Juros de Longo Prazo (TJLP) interest rate, which is
the official rate for governmental long-term loans. For accounting purposes,
although the interest charge must be reflected in the statement of operations
to be tax-deductible, the charge is reversed before calculating net income in
the statutory financial statements and deducted from shareholders' equity in a
manner similar to a dividend. In the U.S. GAAP financial statements, this
notional interest distribution is treated in a manner similar to a dividend,
as a deduction from shareholders' equity. A 15% withholding tax is due by the
shareholders upon receipt of the interest amount but the tax is usually paid
by the companies on behalf of the shareholders, upon distribution of the
interest. Beginning in 1997, the withholding tax has been paid by Brahma and
Antarctica on behalf of its shareholders. As from 1998, such payments are also
deductible for social contribution purposes.

     Interest attributable to shareholders' equity is treated as a dividend
for purposes of the mandatory dividend.

Voting Rights

     Each common share entitles its holder to one vote at meetings of
shareholders of AmBev. Holders of preferred shares are not entitled to vote at
AmBev's shareholders' meetings.

     Brazilian corporation law provides that nonvoting shares entitled to
receive minimum or fixed dividends acquire voting rights in the event that a
company fails to pay the minimum or fixed dividends to which such shares are
entitled for three consecutive fiscal years. The voting rights continue until
payment of dividends is resumed (or until all dividends due are paid, in the
case of preferred shares with cumulative votes). Pursuant to AmBev's by-laws,
the existing preferred shares of AmBev will not acquire such voting rights as
AmBev preferred shares are not entitled to receive minimum or fixed dividends.


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Election of Directors

     Each common share of AmBev represents one vote at any shareholders'
meeting in connection with the election of the board of directors of AmBev.
Shareholders holding shares representing at least 10% of the shares entitled
to vote in the shareholders' meeting, or such smaller percentage applicable
according to a sliding scale determined by the CVM and based on the capital of
the company, have the right to request that a cumulative voting procedure be
adopted. Under such procedure, each voting share shall have as many votes as
there are positions of directors to be filled, and each shareholder may cast
all the votes for a single candidate or distribute them among various
candidates.

     If the cumulative voting procedure is requested by the minority
(non-controlling) shareholders and implemented, a minority shareholder or
group of minority shareholders would have to hold at least 12.1% of the total
number of voting shares represented at the shareholders' meeting in order to
elect one of the current eight members of the board of directors of AmBev.
Under the by-laws of AmBev and applicable law, the number of directors may be
reduced to a minimum of three. Under Brazilian corporation law, if the number
of directors is reduced to five or less, the percentage necessary for any
minority shareholder or group of minority shareholders to elect at least one
member of the board of directors under the cumulative vote procedure cannot
exceed 20% of the voting shares of AmBev. Because the AmBev shareholders'
agreement provides that the Zerrenner Foundation shall have the right to
appoint four members of the board of directors, any reduction in the number of
such members to fewer than four would be subject to the Zerrenner Foundation's
approval.

Liquidation

     In the event of liquidation, a general shareholders meeting shall
determine the form of liquidation and appoint a financial committee to operate
during the liquidation period. See "--Shareholders' Meeting". A liquidator
will be appointed by the board of directors.

     Upon liquidation, the AmBev preferred shares have an absolute preference
over the AmBev common shares. In the event of a liquidation, the assets
available for distribution to AmBev's shareholders would be distributed first
to the preferred shareholders in an amount equal to their pro rata share of
the legal capital of the company (AmBev's current by-laws state that its legal
capital is R$2,565,249,472.76), prior to making any distributions to AmBev's
common shareholders. In the event that the assets to be so distributed are
insufficient to fully compensate AmBev's preferred shareholders, the preferred
shareholders would each receive a pro rata amount (based on their pro rata
share of the legal capital of the company excluding the common shares in such
calculation) of any available assets.

     In the event of liquidation, the creditors of AmBev would not have access
to the assets of the Zerrenner Foundation.

Shareholders' Meeting

     A general meeting is convened by publishing, no fewer than 15 days prior
to the scheduled meeting date and, no fewer than three times, a notice in the
Diario Oficial do Estado de Sao Paulo and in a newspaper with general
circulation in Sao Paulo, where AmBev has its registered office. The
shareholders of AmBev have previously designated local newspapers in the
cities of Sao Paulo and Rio de Janeiro for this purpose. Such notice must
contain the agenda for the meeting.

     A general meeting may be held if shareholders representing at least
one-quarter of the voting shares are present. If no such quorum is present,
notice must again be given in the same manner as described above, and a
meeting may then be convened without any specific quorum requirement, subject
to the minimum quorum and voting requirements for specific matters, as
discussed below. A shareholder without a right to vote may attend a general
meeting and take part in the discussion of matters submitted for
consideration.


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     Except as otherwise provided by law, resolutions of a general meeting are
passed by a simple majority vote of the shares present or represented at the
meeting, abstentions not being taken into account. Under Brazilian corporation
law, the approval of shareholders representing at least a majority of the
issued and outstanding voting shares is required for the types of action
described below, as well as, in the case of items (a) and (b), a majority of
issued and outstanding shares of the affected class:

     (a) creating preferred shares or increasing disproportionately an
         existing class of preferred shares relative to the other classes of
         shares, unless such action is provided for or authorized by the
         by-laws;

     (b) modifying a preference, privilege or condition of redemption or
         amortization conferred on one or more classes of preferred shares, or
         creating a new class with greater privileges than the existing
         classes of preferred shares;

     (c) reducing the mandatory dividend;

     (d) merging AmBev with another company or consolidating or splitting it;

     (e) participating in a centralized group of companies as defined under
         Brazilian corporation law;

     (f) changing the corporate objectives of AmBev;

     (g) creating founders' shares; and

     (h) dissolving or liquidating AmBev, or ceasing its liquidation status.

     General meetings can be called by the board of directors of AmBev. Under
the Brazilian corporation law, meetings can also be convened by AmBev's
shareholders as follows: (i) by any shareholder if, under certain
circumstances set forth in the Brazilian corporation law, the directors take
more than 60 days to convene a general shareholders' meeting; (ii) by the
shareholders of at least 5% of AmBev's total capital stock if, after a period
of 8 days the directors fail to call a general shareholders' meeting that has
been requested by such shareholders; and (iii) by the shareholders of at least
5% of either AmBev's total voting capital stock or AmBev's total nonvoting
capital stock, if after a period of 8 days the directors fail to call a
general meeting for the purpose of installing a fiscal committee that has been
requested by such shareholders. Additionally, under certain circumstances set
forth in the Brazilian corporation law, meetings can also be convened by
AmBev's fiscal committee. For further information regarding AmBev's financial
committee, see "Item 6--Directors, Senior Management and
Employees--Directors--Board Practices--Fiscal Committee".

     A shareholder may be represented at a general meeting by an
attorney-in-fact appointed no more than one year before the meeting, who must
be a shareholder, a company officer or a lawyer. For a public company such as
AmBev, the attorney-in-fact may also be a financial institution.

Restrictions on Foreign Investment

     There are no restrictions on ownership or voting rights in respect of
capital stock of AmBev owned by individuals or legal entities domiciled
outside Brazil. For a description of voting rights, see "--Voting Rights". The
right to convert dividend payments and proceeds from the sale of preferred or
common shares into foreign currency and to remit such amounts outside Brazil,
however, is subject to exchange control restrictions and foreign investment
legislation. For a description of these exchange control restrictions and
foreign investment legislation, see "Item 3--Key Information--Exchange
Controls".


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Appraisal Rights

     Under Brazilian corporation law, a dissenting shareholder has the right
to withdraw from AmBev and be reimbursed for the value of the common or
preferred shares held, whenever a decision is taken at a shareholders' meeting
by a qualified quorum of shareholders representing at least 50% of the total
outstanding voting capital to:

     o  create preferred shares or increase disproportionately an existing
        class of preferred shares relative to the other classes of shares,
        unless such action is provided for or authorized by AmBev's by-laws;

     o  modify a preference, privilege or condition of redemption or
        amortization conferred on one or more classes of preferred shares, or
        create a new class with greater privileges than the existing classes
        of preferred shares;

     o  reduce the mandatory dividend;

     o  merge or consolidate AmBev with another company.

     o  participate in a centralized group of companies as defined under
        Brazilian corporation law Appraisal rights do not apply in connection
        with this matter for dissenting shareholders of AmBev because AmBev
        preferred shares are currently included in the IBOVESPA index of the
        Sao Paulo Stock Exchange and more than 50% of the outstanding shares
        of AmBev are not owned by AmBev's controlling shareholders;

     o  change the corporate objectives of AmBev;

     o  transfer all of the shares of AmBev to another company in order to
        make AmBev a wholly owned subsidiary of such company under an
        incorporation of shares transaction (incorporacao de acoes); or

     o  approve the acquisition of another company, the price of which exceeds
        the limits set forth in Brazilian corporation law.

     Furthermore, if a governmental entity acquires control of AmBev through
expropriation of shares, shareholders will have the right to withdraw from
AmBev and be reimbursed for the value of the shareholders' equity attributable
to their equity interest.

     The appraisal rights lapse 30 days after publication of the minutes of
the relevant shareholders' meeting in the Brazilian press. AmBev would be
entitled to reconsider any action triggering appraisal rights within 10 days
following the expiration of such rights if the redemption of shares of
dissenting shareholders would jeopardize the financial stability of AmBev.
Shares to be purchased by AmBev from the dissenting shareholders exercising
appraisal rights will be valued at an amount equal to the ratable portion
attributable to such shares of the shareholders' equity of AmBev as shown on
the last balance sheet approved at a general meeting of the shareholders (book
value). However, if more than 60 days have elapsed since the date of such
balance sheet, dissenting shareholders may require that the value of their
shares be calculated on the basis of a new balance sheet. As a general rule,
shareholders who acquire their shares after the first notice convening the
shareholders' meeting or after the relevant press release concerning the
meeting is published will not be entitled to appraisal rights.

Preemptive Rights

     Each shareholder of AmBev generally has a preemptive right to subscribe
for shares in capital increases, in proportion to its shareholdings. A minimum
period of 30 days following the publication of notice of the capital increase
is allowed for the exercise of the right and the right is negotiable. In the
event of a capital increase which would maintain or increase the proportion of
capital represented by preferred or common shares, holders of preferred ADSs
or common ADSs, as the case may be, would


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have preemptive rights to subscribe only to newly issued preferred shares or
common shares, as applicable. In the event of a capital increase which would
reduce the proportion of capital represented by preferred shares or common
shares, holders of preferred ADSs or common ADSs, as the case may be, would
have preemptive rights to subscribe for preferred shares or common shares, as
applicable, in proportion to their shareholdings only to the extent necessary
to prevent dilution of their interest in AmBev. AmBev's by-laws provide that
its board of directors may, within the limit of its authorized capital,
withdraw preemptive rights to existing shareholders in connection with an
increase in share capital through sale in stock exchanges, public offerings or
public tender offers. In addition, Brazilian law provides that the exercise of
stock options pursuant to certain stock option plans, such as our stock option
plan, are not subject to preemptive rights.

Form and Transfer

     Brazilian law provides that ownership of shares of capital stock of a
Brazilian corporation shall generally be evidenced only by a record of
ownership maintained by either the corporation or an accredited intermediary,
such as a bank, acting as a registrar for the shares. Banco Itau S.A.
currently maintains AmBev's share ownership records.

     Because the preferred shares and common shares of AmBev are in registered
book-entry form, a transfer of such preferred and common shares is made under
the rules of Brazilian corporation law, which provides that a transfer of
shares is effected by an entry made by the registrar for AmBev's shares in its
books, by debiting the share account of the transferor and crediting the share
account of the transferee.

     Transfers of preferred and common shares by a foreign investor are made
in the same way and executed by such investor's local agent on the investor's
behalf except that, if the original investment was registered with the Central
Bank pursuant to the Foreign Investment Regulations, the foreign investor
should also seek amendment, if necessary, through its local agent, of the
certificate of registration to reflect the new ownership.

     Transfers of shares by a foreign investor are made in the same way and
executed by such investor's local agent on the investor's behalf except that,
if the original investment was registered with the Central Bank pursuant to
Resolution No. 2,689/00 of the Brazilian National Monetary Council, the
foreign investor should also seek amendment, if necessary, through its local
agent, of the certificate of registration to reflect the new ownership.

     The Sao Paulo Stock Exchange operates a central clearing system. A holder
of shares of AmBev may choose, at its discretion, to participate in this
system and all shares elected to be put into the system will be deposited in
custody with the relevant stock exchange, through a Brazilian institution that
is duly authorized to operate by the Central Bank and maintains a clearing
account with the relevant stock exchange. The fact that such shares are
subject to custody with the relevant stock exchange will be reflected in
AmBev's registry of shareholders. Each participating shareholder will, in
turn, be registered in the register of beneficial shareholders of AmBev that
is maintained by the relevant stock exchange and will be treated in the same
way as registered shareholders.

Disclosure of Principal Shareholders

     Under Brazilian law, shareholders owning more than ten percent of a
company's voting shares, such as the holders of AmBev's common shares, must
publicly disclose their shareholder ownership.

Changes in Capital

     The share capital of AmBev is comprised of common shares and preferred
shares, all without par value. There are currently no other classes or series
of preferred shares outstanding. Under Brazilian corporation law, the number
of preferred nonvoting or other restricted voting shares, such as the


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preferred shares, may not exceed two-thirds of the total number of outstanding
shares. The by-laws of AmBev do not provide for the conversion of preferred
shares into common shares.


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                                   TAXATION

     The following discussion summarizes the principal Brazilian and U.S.
Federal income tax consequences of acquiring, holding and disposing of AmBev's
preferred shares or preferred ADSs or AmBev's common shares or common ADSs.
This discussion is not a comprehensive discussion of all the tax
considerations that may be relevant to a decision to purchase preferred shares
or preferred ADSs or common shares or common ADSs and is not applicable to all
categories of investors, some of which may be subject to special rules. Each
prospective purchaser is urged to consult its own tax advisor about the
particular Brazilian and U.S. tax consequences to it of an investment in the
preferred shares or preferred ADSs or common shares or common ADSs.

Brazilian Tax Considerations

     The following discussion summarizes the principal Brazilian tax
consequences of the acquisition, ownership and disposition of preferred and
common shares of AmBev or preferred and common ADSs of AmBev by a holder that
is not deemed to be domiciled in Brazil for purposes of Brazilian taxation
and, in the case of a holder of preferred or common shares, which has
registered its investment in such securities with the Central Bank as a U.S.
dollar investment (in each case, a Non-Brazilian Holder). The discussion does
not purport to be a comprehensive description of all tax considerations that
may be relevant to a decision to purchase preferred and common shares or
preferred or common ADSs. It is based on Brazilian law as currently in effect.
Any change in such law may change the consequences described below. The
following discussion does not specifically address all of the Brazilian tax
considerations applicable to any particular Non-Brazilian Holder, and each
Non-Brazilian Holder should consult his or her own tax advisor concerning the
Brazilian tax consequences of an investment in preferred or common shares or
preferred or common ADSs of AmBev.

     Taxation of Dividends. Dividends, including dividends in kind, paid by
AmBev to The Bank of New York in respect of the preferred or common shares
underlying the ADSs or to a Non-Brazilian Holder in respect of preferred or
common shares generally will not be subject to Brazilian withholding tax.
Dividends relating to profits generated prior to December 31, 1995 are subject
to a Brazilian withholding tax of 15% to 25% according to the tax legislation
applicable to each corresponding year. As from January 1, 1996, stock
dividends relating to profits are also subject to withholding tax in Brazil.

     Taxation of Gains. Gains realized outside of Brazil by a Non-Brazilian
Holder on the disposition of preferred or common ADSs to another Non-Brazilian
Holder are not subject to Brazilian tax.

     The withdrawal of preferred or common ADSs in exchange for preferred or
common shares is not subject to Brazilian tax. The deposit of AmBev's
preferred or common shares in connection with the issuance of preferred or
common ADSs is not subject to Brazilian tax, provided that the preferred or
common shares are registered under the Foreign Investment Regulations and
unless the foreign investor is located in a jurisdiction which does not impose
income tax or which has an income tax rate lower than 20%. In the latter case,
the investor will be subject to the same general taxation rules applicable to
Brazilian residents. In the event the preferred or common shares are not so
registered, the deposit of preferred or common shares in exchange for
preferred or common ADSs may be subject to Brazilian capital gains tax at the
rate of 10% or 15% as described below. Upon receipt of the underlying
preferred or common shares, a Non-Brazilian Holder who qualifies under the
Foreign Investment Regulations will be entitled to register the U.S. dollar
value of such shares with the Central Bank as described below.

     Non-Brazilian Holders are not subject to tax in Brazil on gains realized
on sales of preferred or common shares that occur abroad or on proceeds of a
redemption of, or a liquidating distribution with respect to, preferred or
common shares. As a general rule, Non-Brazilian Holders are subject to a
withholding tax imposed at a rate of 15% on gains realized on sales or
exchanges of preferred or common shares that occur in Brazil to or with a
resident of Brazil, outside a Brazilian stock exchange. Non-Brazilian Holders
are generally subject to withholding tax at a rate of 10% on gains realized on
sales


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or exchanges in Brazil of preferred or common shares that occur on a Brazilian
stock exchange, unless (a) such a sale is made within five business days of
the withdrawal of such preferred or common shares in exchange for ADSs and the
proceeds of such sale are remitted abroad within such five-day period, or (b)
such a sale is made under the Foreign Investment Regulations by Non-Brazilian
Holders which register with the CVM. However, Law No 9,959, dated as of
January 27, 2000, established the rate of 10% shall be increased to 20% for
transactions that occur on or after January 1, 2002. If the foreign investor
is located in a jurisdiction which does not impose income tax or which has an
income tax rate lower than 20%, it will be subject to the same general
taxation rules applicable to Brazilian residents. The "gain realized" as a
result of a transaction on a Brazilian stock exchange is the difference
between the amount in Brazilian currency realized on the sale or exchange of
the shares and their acquisition cost, without any correction for inflation.
The "gain realized" as a result of a transaction with shares which are
registered under a certificate of registration of investment (other than
Foreign Investment Regulations) will be calculated based on the foreign
currency amount registered with the Central Bank. There can be no assurance
that the current preferential treatment for holders of ADSs and Non-Brazilian
Holders of preferred and common shares under the Foreign Investment
Regulations will continue in the future or that it will not be changed in the
future. Reductions in the tax rate provided for by Brazil's tax treaties do
not apply to tax on gains realized on sales or exchanges of preferred or
common shares.

     Any exercise of preemptive rights relating to the preferred or common
shares or preferred or common ADSs of AmBev will not be subject to Brazilian
taxation. Any gain on the sale or assignment of preemptive rights relating to
the preferred or common shares by The Bank of New York will not be subject to
Brazilian taxation.

     The United States and Brazil do not currently have any reciprocal tax
treaty regarding tax withholding provisions.

     Distributions of Interest Attributable to Shareholders' Equity. In
accordance with Law No. 9,249, dated December 26, 1995, Brazilian corporations
may make payments to shareholders characterized as distributions of interest
on the company's shareholders' equity. Such interest is limited to the Federal
government's long-term interest rate (TJLP) as determined by the Central Bank
from time to time (9.25% per annum for the three-month period starting April
1, 2001), and cannot exceed the greater of:

o    50% of net income (before taking such distribution and any deductions for
     income taxes into account) for the period in respect of which the payment
     is made; or

o    50% of retained earnings.

     Distributions of interest on shareholders' equity in respect of the
preferred or common shares paid to shareholders who are either Brazilian
residents or non-Brazilian residents, including holders of ADSs, are subject
to Brazilian withholding tax at the rate of 15% and shall be deductible by
AmBev as long as the payment of a distribution of interest is approved in a
general meeting of shareholders of AmBev. The distribution of interest on
shareholders' equity may be determined by the board of directors of AmBev. No
assurance can be given that the board of directors of AmBev will not determine
that future distributions of profits may be made by means of interest on
shareholders' equity instead of by means of dividends.

     The amounts paid as distribution of interest on shareholders' equity are
deductible for corporate income tax and social contribution on profit, both of
which are taxes levied on AmBev's profits.

Other Relevant Brazilian Taxes

     There are no Brazilian inheritance, gift or succession taxes applicable
to the ownership, transfer or disposition of preferred or common shares or
preferred or common ADSs by a Non-Brazilian Holder except for gift and
inheritance taxes which are levied by some states of Brazil on gifts made or
inheritances bestowed by individuals or entities not resident or domiciled in
Brazil or domiciled within


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the state to individuals or entities resident or domiciled within such state
in Brazil. There are no Brazilian stamp, issue, registration or similar taxes
or duties payable by holders of preferred or common shares or preferred or
common ADSs.

     Pursuant to Decree 2,219 of May 2, 1997, Brazilian currency resulting
from the conversion of the proceeds received by a Brazilian entity from a
foreign investment in the Brazilian securities market, including those in
connection with the investment in the preferred or common shares of AmBev, the
preferred or common ADSs of AmBev and those made under Foreign Investment
Regulations, is potentially subject to a transactions tax (IOF), although at
present the rate of such tax is zero percent. Under Law 8,894 of June 21,
1994, such IOF tax rate may be increased at any time to a maximum of 25%, but
any such increase will only be applicable to transactions occurring after such
increase becomes effective.

     CPMF. Financial transfers are taxed by the CPMF (Temporary Contribution
over Financial Transactions), at a rate of 0.38%. Specifically in connection
with foreign investments, the CPFM is levied upon the remittance of proceeds
on the amount converted in reais of the transaction and is required to be
withheld by the financial institution that carries out the transaction.

     Registered Capital. The amount of an investment in preferred or common
shares held by a Non-Brazilian Holder who qualifies under the Foreign
Investment Regulations and obtains registration with the CVM, or by The Bank
of New York, as the depositary representing such holder, is eligible for
registration with the Central Bank. Such registration allows the remittance
outside of Brazil of any proceeds of distributions on the shares, and amounts
realized with respect to disposition of such shares. The amounts received in
Brazilian currency are converted into foreign currency through the use of the
commercial market rate. The registered capital for preferred shares purchased
in the form of a preferred ADSs or common shares purchased in the form of a
common ADS or purchased in Brazil, and deposited with The Bank of New York in
exchange for a preferred or common ADS will be equal to their purchase price
(in U.S. dollars) to the purchaser. The registered capital for preferred or
common shares that are withdrawn upon surrender of preferred or common ADSs,
as applicable, will be the U.S. dollar equivalent of the average price of the
preferred or common shares, as applicable, on the Brazilian stock exchange on
which the greatest number of such preferred or common shares, as applicable,
was sold on the day of withdrawal. If no preferred or common shares, as
applicable, were sold on such day, the registered capital will refer to the
average price on the Brazilian stock exchange on which the greatest number of
preferred or common shares, as applicable, were sold in the 15 trading
sessions immediately preceding such withdrawal. The U.S. dollar value of the
preferred or common shares, as applicable, is determined on the basis of the
average commercial market rate quoted by the Central Bank on such date or, if
the average price of preferred or common shares is determined under the last
preceding sentence, the average of such average quoted rates on the same 15
dates used to determine the average price of the preferred or common shares.

     A Non-Brazilian Holder of preferred or common shares may experience
delays in effecting such action which may delay remittances abroad. Such a
delay may adversely affect the amount, in U.S. dollars, received by the
Non-Brazilian Holder.

Certain United States Federal Income Tax Considerations

     The following summary describes the material United States federal income
tax consequences of holding our preferred shares, preferred ADSs, common
shares or common ADSs. This summary is based on the Internal Revenue Code of
1986, as amended (the Code), its legislative history, existing final,
temporary and proposed Treasury Regulations, rulings and judicial decisions,
all as currently in effect and all of which are subject to prospective and
retroactive rulings and changes.

     This summary does not purport to address all United States federal income
tax consequences that may be relevant to a particular holder and you are urged
to consult your own tax advisor regarding your specific tax situation. The
summary applies only to holders who hold preferred shares, preferred ADSs,


                                      113


<PAGE>


common shares or common ADSs as "capital assets" (generally, property held for
investment) under the Code and does not address the tax consequences that may
be relevant to holders in special tax situations including, for example:

     o  insurance companies;

     o  tax-exempt organizations;

     o  broker-dealers;

     o  traders in securities that elect to mark to market;

     o  banks or other financial institutions;

     o  holders whose functional currency is not the United States dollar;

     o  United States expatriates;

     o  holders that hold our preferred shares, preferred ADSs, common shares
        or common ADSs as part of a hedge, straddle or conversion transaction;
        or

     o  holders that own, directly, indirectly, or constructively, 10% or more
        of the total combined voting power of our preferred shares, preferred
        ADSs, common shares or common ADSs.

     This summary assumes that we are not a passive foreign investment company
for United States federal income tax purposes. Please see the discussion under
"--Taxation of U.S. Holders--Passive Foreign Investment Company Rules" below.

     Further, this summary does not address the alternative minimum tax
consequences of holding preferred shares, preferred ADSs, common shares or
common ADSs or the indirect consequences to holders of equity interests in
entities that own our preferred shares, preferred ADSs, common shares or
common ADSs. In addition, this summary does not address the state, local and
foreign tax consequences of holding our preferred shares, preferred ADSs,
common shares or common ADSs.

     You should consult your own tax advisor regarding the United States
federal, state, local and foreign and other tax consequences of purchasing,
owning, and disposing of our preferred shares, preferred ADSs, common shares
or common ADSs in your particular circumstances.

Taxation of U.S. Holders

     You are a "U.S. Holder" if you are a beneficial owner of preferred
shares, preferred ADSs, common shares or common ADSs and you are for United
States federal income tax purposes:

     o  a citizen or resident of the United States;

     o  a corporation, or any other entity taxable as a corporation, created
        or organized in or under the laws of the United States or any state
        thereof, including the District of Columbia;

     o  an estate the income of which is subject to United States federal
        income tax regardless of its source; or

     o  a trust if a court within the United States is able to exercise
        primary supervision over its administration and one or more United
        States persons have the authority to control all substantial decisions
        of the trust.

     If a partnership holds preferred shares, preferred ADSs, common shares or
common ADSs, the tax treatment of a partner will generally depend upon the
status of the partner and upon the activities of the partnership. A
prospective investor who is a partner of a partnership holding our preferred
shares, preferred ADSs, common shares or common ADSs should consult its own
tax advisor.


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<PAGE>


     A "Non-U.S. Holder" is a beneficial owner of preferred shares, preferred
ADSs, common shares or common ADSs that is not a U.S. Holder.

     For United States federal income tax purposes, a U.S. Holder of an ADS
will be treated as the owner of the preferred shares or common shares
represented by the ADS.

     Distributions on preferred shares, preferred ADSs, common shares or
common ADSs

     Cash distributions made by us to a U.S. Holder (including amounts
withheld to pay Brazilian withholding taxes) with respect to preferred shares,
preferred ADSs, common shares or common ADSs (including distributions of
interest on shareholders' equity) generally will be taxable to such U.S.
Holder as ordinary dividend income when such distribution is paid, actually or
constructively, out of our current or accumulated earnings and profits (as
determined for United States federal income tax purposes). Distributions in
excess of our current or accumulated earnings and profits will be treated
first as a non- taxable return of capital reducing such U.S. Holder's tax
basis in the preferred shares, preferred ADSs, common shares or common ADSs.
Any distribution in excess of such tax basis will be treated as capital gain
and will be either long-term or short-term capital gain depending upon whether
the U.S. Holder held the preferred shares, preferred ADSs, common shares or
common ADSs for more than one year.

     A U.S. Holder will be entitled, subject to a number of complex
limitations, to claim a United States foreign tax credit in respect of any
Brazilian withholding taxes imposed on distributions received on preferred
shares, preferred ADSs, common shares or common ADSs. U.S. Holders who do not
elect to claim a foreign tax credit may instead claim a deduction in respect
of such withholdings. Dividends received with respect to the preferred shares,
preferred ADSs, common shares or common ADSs will be treated as foreign source
income, which may be relevant in calculating such U.S. Holder's United States
foreign tax credit limitation. Dividends paid with respect to the preferred
shares, preferred ADSs, common shares or common ADSs generally will constitute
"passive income" or, in the case of certain holders, "financial services
income", for United States foreign tax credit limitation purposes. Holders are
urged to consult their tax advisors regarding the availability of the foreign
tax credit under their particular circumstances.

     Dividends paid by us generally will not be eligible for the dividends
received deduction available otherwise to certain United States corporate
shareholders.

     The amount of any cash distribution paid in Brazilian currency will equal
the U.S. dollar value of the distribution, calculated by reference to the
exchange rate in effect at the time the distribution is received by the
depositary (in the case of ADSs) or by the U.S. Holder (in the case of
preferred shares or common shares held directly by such U.S. Holder),
regardless of whether the payment is in fact converted to U.S. dollars at that
time. A U.S. Holder should not recognize any foreign currency gain or loss if
such Brazilian currency is converted into U.S. dollars on the date received.
If the Brazilian currency is not converted into U.S. dollars on the date of
receipt, however, gain or loss may be recognized upon a subsequent sale or
other disposition of the Brazilian currency. Such foreign currency gain or
loss, if any, will be United States source ordinary income or loss.

     Section 305 of the Code provides special rules for the tax treatment of
preferred stock. According to the Treasury Regulations under that section, the
term preferred stock generally refers to stock which enjoys certain limited
rights and privileges (generally associated with specified dividend and
liquidation priorities) but does not participate in corporate growth to any
significant extent. While our preferred shares have some preferences over our
common shares, the preferred shares are not fixed as to dividend payments or
liquidation value; thus, although the matter is not entirely clear, we believe
that the preferred shares should be treated as "common stock" within the
meaning of Section 305 of the Code. If the preferred shares are treated as
"common stock" for purposes of Section 305, distributions to U.S. Holders of
additional shares of such "common stock" or preemptive rights relating to such
"common stock" with respect to their preferred shares or preferred ADSs that
are made as part of a pro rata distribution to all shareholders in most
instances will not be subject to United States Federal income tax. On the
other


                                      115


<PAGE>


hand, if the preferred shares are treated as "preferred stock" within the
meaning of Section 305, and if the U.S. Holder receives a distribution of
additional shares or preemptive rights as described in the preceding sentence,
such distributions (including amounts withheld in respect of any Brazilian
taxes) will be treated as dividends that are includable in the U.S. Holders'
gross income to the same extent and in the same manner as distributions
payable in cash. In that event, the amount of such distribution (and the basis
of the new shares or preemptive rights so received) will equal the fair market
value of the shares or preemptive rights on the date of distribution.

     Sale or exchange of preferred shares, preferred ADSs, common shares or
common ADSs

     A U.S. Holder will generally recognize capital gain or loss upon the
sale, exchange or other disposition of preferred shares, preferred ADSs,
common shares or common ADSs measured by the difference between the U.S.
dollar value of the amount received and the U.S. Holder's tax basis
(determined in U.S. dollars) in the preferred shares, preferred ADSs, common
shares or common ADSs. If a Brazilian tax is withheld on the sale or
disposition of a share, the amount realized by a U.S. Holder will include the
gross amount of the proceeds of that sale or disposition before deduction of
the Brazilian tax. Any gain or loss will be long-term capital gain or loss if
the preferred shares, preferred ADSs, common shares or common ADSs have been
held for more than one year. Long-term capital gains of individuals are
eligible for reduced rates of taxation. Your ability to deduct capital losses
is subject to limitations. Capital gain or loss, if any, realized by a U.S.
Holder on the sale, exchange or other disposition of a common share, common
ADS, preferred share or preferred ADS generally will be treated as United
States source income or loss for United States foreign tax credit purposes.
Consequently, in the case of a disposition of a common share or preferred
share that is subject to Brazilian tax imposed on the gain (or, in the case of
a deposit, in exchange for a common ADS or preferred ADS of a common share or
preferred share, as the case may be, that is not registered pursuant to
Resolution No. 2,689/00, on which a Brazilian capital gains tax is imposed
(see "--Brazilian Tax Considerations--Taxation of Gains")), the U.S. Holder
may not be able to benefit from the foreign tax credit for that Brazilian tax
unless it can apply the credit against United States tax payable on other
income from foreign sources in the appropriate income category, or,
alternatively, it may take a deduction for the Brazilian tax.

     Passive Foreign Investment Company Rules

     Based upon the nature of its current and projected income, assets and
activities, we do not expect the preferred shares, preferred ADSs, common
shares or common ADSs to be considered shares of a passive foreign investment
company (PFIC) for United States Federal income tax purposes. In general, a
foreign corporation is a PFIC with respect to a U.S. Holder if, for any
taxable year in which the U.S. Holder holds stock in the foreign corporation,
at least 75% of its gross income is passive income or at least 50% of the
value of its assets (determined on the basis of a quarterly average) produce
passive income or are held for the production of passive income. The
determination of whether the preferred shares, preferred ADSs, common shares
or common ADSs constitute shares of a PFIC is a factual determination made
annually and thus may be subject to change.

     If we are treated as a PFIC, contrary to the discussion above, a U.S.
Holder would be subject to special rules with respect to (a) any gain realized
on the sale or other disposition of common shares, common ADSs, preferred
shares or preferred ADSs and (b) any "excess distribution" by us to the U.S.
Holder (generally, any distribution during a taxable year in which
distributions to the U.S. Holder on the common shares, common ADSs, preferred
shares or preferred ADSs exceed 125% of the average annual taxable
distribution the U.S. Holder received on the common shares, common ADSs,
preferred shares or preferred ADSs during the preceding three taxable years
or, if shorter, the U.S. Holder's holding period for the common shares, common
ADSs, preferred shares or preferred ADSs). Under those rules, (a) the gain or
excess distribution would be allocated ratably over the U.S. Holder's holding
period for the common shares, common ADSs, preferred shares or preferred ADSs,
(b) the amount allocated to the taxable year in which the gain or excess
distribution is realized and to taxable years before the first day


                                      116


<PAGE>


we became a PFIC would be taxable as ordinary income, (c) the amount allocated
to each prior year in which we were a PFIC would be subject to tax at the
highest tax rate in effect for that year and (d) the interest charge generally
applicable to underpayments of tax would be imposed in respect of the tax
attributable to each prior year in which we were a PFIC.

     A U.S. Holder who owns common shares, common ADSs, preferred shares or
preferred ADSs during any year we are a PFIC must file Internal Revenue
Service Form 8621. In general, if we are treated as a PFIC, the rules
described in the second paragraph of this section can be avoided by a U.S.
Holder that elects to be subject to a mark-to-market regime for stock in a
PFIC. A U.S. Holder may elect mark-to- market treatment for its common shares,
common ADSs, preferred shares or preferred ADSs, provided the common shares,
common ADSs, preferred shares or preferred ADSs, for purposes of the rules,
constitute "marketable stock" as defined in Treasury Regulations. A U.S.
Holder electing the mark-to- market regime generally would treat any gain
recognized under mark-to-market treatment or on an actual sale as ordinary
income and would be allowed an ordinary deduction for any decrease in the
value of common shares, common ADSs, preferred shares or preferred ADSs in any
taxable year and for any loss recognized on an actual sale, but only to the
extent, in each case, of previously included mark-to-market income not offset
by previously deducted decreases in value. A U.S. Holder's basis in common
shares, common ADSs, preferred shares or preferred ADSs would increase or
decrease by gain or loss taken into account under the mark-to-market regime. A
mark-to-market election is generally irrevocable.

Taxation of Non-U.S. Holders

     Distributions on Preferred Shares, Preferred ADSs, Common Shares or
Common ADSs

     Non-U.S. Holders generally will not be subject to United States federal
income or withholding tax on dividends received from us with respect to
preferred shares, preferred ADSs, common shares or common ADSs, unless such
income is considered effectively connected with the Non-U.S. Holder's conduct
of a United States trade or business (and, if required by an applicable income
tax treaty, the income is attributable to a permanent establishment maintained
in the United States).

     Sale or Exchange of Preferred Shares, Preferred ADSs, Common Shares or
Common ADSs

     Non-U.S. Holders generally will not be subject to United States federal
income tax on any gain realized upon the sale, exchange or other disposition
of preferred shares, preferred ADSs, common shares or common ADSs unless:

     o  such gain is considered effectively connected with the Non-U.S.
        Holder's conduct of a United States trade or business (and, if
        required by an applicable income tax treaty, the income is
        attributable to a permanent establishment maintained in the United
        States); or

     o  such Non-U.S. Holder is an individual that is present in the United
        States for 183 days or more during the taxable year of the disposition
        and certain other conditions are met.

     In addition, if you are a corporate Non-U.S. Holder, your earnings and
profits that are attributable to effectively connected income (subject to
certain adjustments) may be subject to an additional branch profits tax at a
rate of 30% (or such lower rate as may be specified by an applicable income
tax treaty).

Backup Withholding and Information Reporting

     In general, dividends on preferred shares, preferred ADSs, common shares
or common ADSs, and payments of the proceeds of a sale, exchange or other
disposition of preferred shares, preferred ADSs, common shares or common ADSs,
paid to a U.S. Holder within the United States or through certain United
States-related financial intermediaries are subject to information reporting
and may be subject to backup withholding at a maximum rate of 31% unless the
holder is a corporation or otherwise exempt recipient or provides an accurate
taxpayer identification number and certifies that no loss of exemption from
backup withholding has occurred.


                                      117


<PAGE>


     Non-U.S. Holders generally are not subject to information reporting or
backup withholding. However, such a holder may be required to provide a
certification to establish its non-U.S. status in connection with payments
received within the United States or through certain U.S.-related financial
intermediaries.

     You generally may obtain a refund of any amounts withheld under the
backup withholding rules that exceed your income tax liability by filing a
refund claim with the United States Internal Revenue Service.


                                      118


<PAGE>


                             DOCUMENTS ON DISPLAY

         AmBev is subject to the informational reporting requirements of the
United States Securities Exchange Act of 1934, as amended, and files with the
SEC:

     o  annual reports;

     o  certain other reports that it makes public under Brazilian law, files
        with the Brazilian stock exchanges or distributes to shareholders; and

     o  other information.

     You may read and copy any reports or other information that AmBev files
at the SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C.
20549, and at the SEC's regional offices located at 7 World Trade Center, Room
1300, 13th Floor, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Please call the SEC at
1-800- SEC-0330 for further information on the public reference room.
Electronic filings made through the Electronic Data Gathering, Analysis and
Retrieval System are also publicly available through the Securities and
Exchange Commission's web site on the Internet at http://www.sec.gov. In
addition, material filed by AmBev may also be inspected at the offices of the
New York Stock Exchange at 20 Broad Street, New York, New York 10005.

     As a foreign private issuer, AmBev is exempt from the rules under the
Exchange Act prescribing the furnishing and content of proxy statements and
will not be required to file proxy statements with the SEC and its officers,
directors and principal shareholders will be exempt from the reporting and
"short swing" profit recovery provisions contained in Section 16 of the
Exchange Act.

     You may obtain documents from AmBev by requesting them in writing or by
telephone at the following addresses:

     Companhia de Bebidas das Americas - AmBev
     Attention: Investor Relations Department

     Telephone numbers:  (55-11) 3741-7553
                         (55-11) 3741-7560

     Fax:                (55-11) 3741-3527

     Email:              ir@ambev.com.br

     You may obtain additional information about AmBev through its web site at
"www.ambev.com.br". The information contained therein is not part of this
annual report.


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<PAGE>


Item 11.   Quantitative and Qualitative Disclosures About Market Risk

              QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT RISK

Market Risk

     AmBev is exposed to various market risks, including changes in foreign
currency exchange rates and interest rates and changes in the prices of
certain commodities, including malt, aluminum and sugar. Market risk is the
potential loss arising from adverse changes in market rate and prices. AmBev
enters into derivatives and other financial instruments to manage and reduce
the impact of fluctuations in foreign currency exchange rates and interest
rates. AmBev has established policies and procedures for risk assessment and
the approval, reporting and monitoring of derivative financial activities.

     See Notes 2(c) and 15 to AmBev's consolidated financial statements for a
discussion of the accounting policies and information on derivative financial
instruments.

     AmBev's trading securities, which consist of fixed-term obligations and
government securities, are not subject to equity risk.

Commodity Risk

     We use a large volume of agricultural materials to produce our products,
including malt and hops for our beer and sugar, guarana and other fruits and
sweeteners for our soft drinks. See "Item 4--Information on the Company--AmBev
Business Overview--Production and Availability of Raw Materials". AmBev
purchases a significant portion of its malt and all of its hops outside of
Brazil. AmBev purchases the remainder of its malt and its sugar, guarana and
other fruits and sweeteners locally. AmBev also purchases substantial
quantities of aluminum cans.

     AmBev produces approximately 18% of the guarana it uses. The remainder
and all other commodities are purchased from third parties. We believe that
adequate supplies of the commodities we use are available at the present time
but we cannot predict the future availability of these commodities or the
prices we will have to pay for such commodities. The commodity markets have
experienced and will continue to experience price fluctuations. We believe
that the future price and supply of agricultural materials will be determined
by, among other factors, the level of crop production, weather conditions,
export demand, and government regulations and legislation affecting
agriculture; and that the price of aluminum will be largely influenced by
international market prices. See "Item 4--Information on the Company--AmBev
Business Overview--Property, Plant and Equipment".

     All of the hops we purchase in the international markets outside of South
America we pay in dollars. In addition, although we purchase aluminum cans in
Brazil, the price we pay is directly influenced by the fluctuation of the
dollar against the real. We currently do not hedge the foreign exchange risk
to which we are exposed as a result of these products being priced in dollars.

Foreign Exchange Risk

     AmBev is exposed to fluctuations in foreign exchange rate movements
because substantially all of its revenues are in reais, while a significant
portion of its debt is denominated in or indexed to U.S. dollars. In addition,
a significant portion of its operating expenses, in particular those related
to hops, malt and aluminum, are also denominated in or linked to U.S. dollars.
See "Item 3--Key Information--Risk Factors--Factors Relating to
Brazil--Substantial exchange rate fluctuations could harm AmBev and reduce the
market value of our securities". AmBev enters into derivative financial
instruments to manage and reduce the impact of changes in foreign currency
exchange rates in respect of its dollar-denominated or indexed debt. See
"--Operating Results--Reporting Currency and Foreign Currency Effects". As of
December 31, 2000, derivative activities consisted of forward foreign exchange
contracts and foreign currency swaps. The table below provides information
about AmBev's significant exchange rate risk


                                      120


<PAGE>


sensitive instruments as of December 31, 2000. The fair values of these
instruments and their contact terms have been categorized by expected maturity
dates.
<TABLE>
<CAPTION>
<S>                               <C>         <C>        <C>       <C>       <C>       <C>       <C>       <C>
                                                   Instruments with Foreign Exchange Rate Risk

                                                            Principal Maturities Periods
                ----------------------------------------------------------------------------------------------------
                                                                                                           Fair
                                  2001       2002       2003      2004      2005    Thereafter  Total      Value
                                  ----       ----       ----      ----      ----    ----------  -----      -----
                                                       (US$ equivalent in millions)
Real Functional Currency
Trading securities in U.S.
dollars:
    Fixed rate.............     US$231.6                                                        US$231.6
        Average interest rate        9.7%
    Variable rate..........
        Average interest rate
Cash and cash equivalents
denominated in U.S. dollars
    Variable rate..........     US$104.7                                                        US$104.7
        Average interest rate       12.0%
Cash and cash equivalents
denominated in other
currencies.................
    Fixed rate.............       US$0.3                                                          US$0.3
        Average interest rate       12.0%
Short-term debt
    denominated in U.S.
    dollars................
    Fixed rate.............    US$(335.8)                                                      US$(335.8)
        Average interest rate        8.3%
Short-term debt denominated
in other currencies........
    Fixed rate.............      US$(4.3)                                                        US$(4.3)
        Average interest rate       10.5%
Long-term debt denominated
in U.S. dollars............
    Fixed rate ............      US$38.0   US$(18.6) US$(74.2)  US$(7.6)  US$(15.6) US$(7.1)   US$(161.1)
        Average interest rate        7.9%       7.9%      7.9%      7.9%       7.9%     9.7%
Forward exchange
agreements
Receive US$/pay R$:
    Notional amount........      US$44.0                                                       US$44.0       US$0
        Average exchange rate
           (per US$1)......        1.959

Receive R$ /pay US$:
    Notional amount........      US$47.0                                                       US$47.0       US$0.128
        Average exchange rate     2.0345

U.S. Dollar Functional
Currency (in subsidiaries
outside of Brazil)

Notional amount............     US$220.0                                                      US$220.0       US$(2.6)
        Average exchange rate
        (per US$1).........       1.0328
</TABLE>


                                                        121


<PAGE>


Interest Rate Risk

    AmBev is exposed to interest rate volatility with respect to its cash and
cash equivalents, trading securities and fixed- and floating-rate debt.
AmBev's dollar-denominated cash equivalents generally bear interest at a
floating rate. At December 31, 2000, AmBev's trading securities were
denominated in reais. The reais-denominated trading securities in which AmBev
invests generally bear interest at the CDI rate.

    At December 31, 2000, US$514.1 million of our debt bore interest at fixed
rates. The remainder of our debt, US$509.1 million at December 31, 2000, bore
interest at floating rates. See "--Liquidity and Capital
Results--Debt--Long-Term Debt".

    The table below provides information about AmBev's significant interest
rate risk sensitive instruments as of December 31, 2000. The fair values of
these instruments and their terms have been categorized by expected maturity
dates.
<TABLE>
<CAPTION>
<S>                              <C>         <C>       <C>         <C>       <C>       <C>        <C>        <C>
                                                     Instruments with Interest Rate Risk

                                                        Principal Maturities Periods
                         ------------------------------------------------------------------------------------------
                                                                                                             Fair
                                2001        2002       2003       2004       2005    Thereafter   Total      Value
                                ----        ----       ----       ----       ----    ----------   -----      -----
                                                        (US$ equivalent in millions)

Instruments entered into
    trading purposes:    for
Trading securities in U.S
dollars:                 .
    Fixed rate...........       US$203.9                                                       US$203.9      US$203.9
        Average interest rate       10.2%
    Variable rate........
        Average interest rate

Instruments entered into
    other than for trading
    purposes:

Brazilian reais:
Cash and cash equivalents
in reais
    Variable rate........       US$176.9                                                       US$176.9      US$176.9
        Average interest rate       15.7%
Short-term debt
denominated in reais.....       US$(80.4)                                                      US$(80.4)     US$(80.4)
    Variable rate........            6.0%
        Variable interest
        rate(1)..........
    Fixed rate...........
Long-term debt denominated
in reais.....
    Variable rate........       US$(153.8) US$(137.9) US$(47.1)  US$(66.8) US$(21.4)  US$(6.4) US$(433.4)    US$(433.4)
        Average interest rate         9.3%       9.3%      9.3%       9.3%      9.3%      9.3%
    Fixed rate...........         US$(5.8)   US$(5.1)                                 US$(1.7) US$ (12.6)    US$ (12.6)
        Average interest rate        13.0%       3.5%                                     2.4%
</TABLE>


                                      122


<PAGE>

<TABLE>
<CAPTION>
<S>                              <C>         <C>       <C>         <C>       <C>       <C>        <C>        <C>
                                                        Principal Maturities Periods
                         ------------------------------------------------------------------------------------------
                                                                                                             Fair
                                2001        2002       2003       2004       2005    Thereafter   Total      Value
                                ----        ----       ----       ----       ----    ----------   -----      -----
                                                        (US$ equivalent in millions)
Foreign Currencies:
Cash and cash equivalents
    denominated in U.S.
    dollars
    Variable rate........       US$62.4                US$41.3                                    US$104.7   US$ 104.7
        Average interest rate      12.0%

Cash and cash equivalents
    denominated in other
    currencies
    Variable rate........       US$0.3                                                             US$ 0.3     US$ 0.3
        Average interest rate     12.0%

Short-term debt denominated
    in U.S. dollars......
    Fixed rate...........       US$(335.8)                                                       US$(335.8)  US$(335.8)
        Average interest rate         8.3%

Short-term debt denominated
    in other currencies..
                                  US$(4.3)
    Fixed rate...........                                                                          US$(4.3)    US$(4.3)
        Average interest rate.       10.5%

Long-term debt denominated
    in U.S. dollars......
    Fixed rate...........         US$(3.8)  US$(18.6) US$(74.2)   US$(7.6)  US$(15.6)  US$(7.4)  US$(161.4)  US$(161.4)
        Average interest rate         7.9%       7.9%      7.9%       7.9%       7.9%

Interest rate derivatives
Interest rate swaps
Pay variable (R$)/receive
fixed (US$):
    Notional amount......         US$92.2                                                          US$92.2      US$1.2
        Average pay rate.            15.7%
        Average receive rate          8.6%
Pay fixed (US$)/receive
variable (R$):
    Notional amount......         US$20.9                                                          US$20.9      US$1.2
        Average pay rate.            13.8%
        Average receive rate         15.7%
</TABLE>

-------------------------

(1) Most of the variable rate debt accrues interest at the Taxa de Juros de
    Longo Prazo (TJLP) plus a spread. The weighted-average spread was 2.95% at
    December 31, 2000. The TJLP is a long-term nominal interest rate fixed by
    the government on a quarterly basis. During the periods set forth below
    the TJLP was:

                                  2001           2000             1999
                                  ----           ----             ----
December 1/February 28..........  9.25%          12.00%           12.84%
April 1/May 31..................  9.25%          11               13.48
August 30.......................  -              10.25            14.05
November 30.....................  -               9.75%           12.5



Item 12.  Description of Securities Other than Equity Securities

        Not Applicable


                                      123


<PAGE>


PART II

Item 13.  Defaults, Dividend Arrearages and Delinquencies

        Not Applicable

Item 14.  Material Modifications to the Rights of Security Holders and Use
          of Proceeds

        Not applicable.


Item 15.  Reserved.

Item 16.  Reserved.


                                      124


<PAGE>


PART III

Item 17.  Financial Statements

    The Company is furnishing financial statements pursuant to the
instructions of Item 18 of Form 20-F.

Item 18.  Financial Statements

    See pages F-1 through F-101.

          Index to Consolidated Financial Statements
Page

          Report of Independent Accountants                    F-2
          Consolidated Balance Sheet                           F-4
          Consolidated Statement of Operations                 F-7
          Consolidated Statement of Cash Flows                 F-9
          Statements of Changes in Shareholders' Equity        F-12
          Notes of Financial Statements                        F-17


Item 19.  Exhibits

     1.1  By-laws of Companhia de Bebidas das Americas-AmBev (English-language
          translation thereof) (incorporated by reference to Annex A to the
          prospectus filed as part of the Form F-4 filed by AmBev on August
          29, 2000), as amended on April 27, 2001 (the amendments to the
          by-laws are incorporated by reference to the Form 6-K filed by AmBev
          on May 30, 2001).

     2.1  Form of Common ADS Deposit Agreement among AmBev, The Bank of New
          York, as depositary, and the holders from time to time of Common
          ADSs (incorporated by reference to Exhibit A of the Form F-6 filed
          by AmBev on October 20, 2000).

     2.2  Form of Preferred ADS Deposit Agreement among AmBev, The Bank of New
          York, as depositary, and the holders from time to time of Preferred
          ADSs (incorporated by reference to Exhibit A of the Form F-6 filed
          by AmBev on October 20, 2000).

     2.3  Form of American Depositary Receipt for Common ADSs (included in
          Exhibit 2.1).

     2.4  Form of American Depositary Receipt for Preferred ADSs (included in
          Exhibit 2.2).

     3.1  Shareholders' Agreement of Companhia de Bebidas das Americas-AmBev
          dated as of July 1, 1999 among Fundacao Antonio e Helen Zerrenner
          Instituicao Nacional de Beneficencia, Braco S.A., Empresa de
          Administracao e Participacoes S.A., Companhia de Bebidas das
          Americas-AmBev, Jorge Paulo Lemann, Marcel Herrmann Telles, and
          Carlos Alberto da Veiga Sicupira (English-language translation
          thereof) (incorporated by reference to Annex B to the prospectus
          filed as part of the Form F-4 filed by AmBev on August 29, 2000).

     4.1  Performance Agreement between AmBev and the Conselho Administrativo
          de Defesa Economica (CADE), dated April 19, 2000 (incorporated by
          reference to Exhibit 10.8 to the Form F-4 filed by AmBev on August
          29, 2000).

     8.1  List of Material Subsidiaries of Companhia de Bebidas das
          Americas-AmBev.


                                      125


<PAGE>



Signatures

    Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant, Companhia de Bebidas das Americas-AmBev, certifies
that it meets all of the requirements for filing on Form 20-F/A and that it
has duly caused and authorized the undersigned to sign this annual report to
be signed on its behalf.

                                Companhia de Bebidas das Americas-AmBev

                                By:/s/ Magim Rodriguez Junior
                                    -----------------------------------------
                                   Name: Magim Rodriguez Junior
                                   Title:  Chief Executive Officer

                                By:/s/ Luis Felipe Pedreira Dutra Leite
                                    ----------------------------------------
                                   Name: Luis Felipe Pedreira Dutra Leite
                                   Title: Chief Financial Officer

Date: July 23, 2001


                                      126


<PAGE>


EXHIBIT 8.1-AMBEV'S MATERIAL SUBSIDIARIES

    AmBev's operations are conducted principally by CBB and its direct and
indirect subsidiaries, and through companies in which CBB holds a direct or
indirect majority or minority interest. The following is a list of the
significant companies that AmBev controlled, either directly or indirectly, as
of May 1, 2001:

     o  Companhia de Brasileira de Bebidas (CBB) (incorporated in Brazil). CBB
        is our principal operating subsidiary that engages in the production,
        distribution and marketing of beverages. AmBev holds 100% of CBB.

     o  Arosuco Aromas e Sucos S.A. (Arosuco) (incorporated in Brazil).
        Arosuco produces concentrates for Brahma's soft drinks. AmBev
        controls, directly or indirectly, 100% of the voting and 100% of the
        total equity of this entity.

     o  CA Cervecera Nacional (CACN) (incorporated in Venezuela). CACN
        produces beer in Venezuela. CACN owns Mar Caribe Distribuidora, a beer
        distributor in Venezuela. AmBev controls, directly or indirectly,
        50.2% of the voting and 50.2% of the total equity of this entity.

     o  CCBA S.A. (incorporated in Argentina). CCBA produces beer and soft
        drinks in Argentina. AmBev controls, directly or indirectly, 70% of
        the voting and 70% of the total equity of this entity.

     o  Cervejaria Astra S.A. (incorporated in Brazil). Astra has two units:
        one in Fortaleza, in the state of Ceara, where it produces soft
        drinks, and the other in Sao Luiz, in the state of Maranhao, where it
        produces beer. AmBev controls, directly or indirectly, 50% of the
        voting and 43.2% of the total equity of this entity.

     o  Cerveceria y Malteria Paysandu (Cympay) (incorporated in Uruguay).
        Cympay produces, markets and distributes beer in Uruguay. AmBev
        controls, directly or indirectly, 95.4% of the voting and 95.4% of the
        total equity of this entity.

     o  Cervejarias Aguas Claras S.A. (incorporated in Brazil). Aguas Claras
        is a brewery located in the state of Sergipe. AmBev controls, directly
        or indirectly, 100% of the voting and 97% of the total equity of this
        entity.

     o  Cervejarias Reunidas Skol Caracu S.A. (incorporated in Brazil). Skol
        produces Skol beer through two branches: one in Guarulhos, state of
        Sao Paulo, and the other in the federal district of Brasilia. AmBev
        controls, directly or indirectly, 99.7% of the voting and 99.7% of the
        total equity of this entity.

     o  Compania Salus (incorporated in Uruguay). Salus produces, markets and
        distributes beer in Uruguay. AmBev controls, directly or indirectly,
        15% of the voting and 15.5% of the total equity of this entity.

     o  CRBS S.A. (incorporated in Brazil). CRBS is a subsidiary that produces
        soft drinks and beer through five branches: one in each of Sao Paulo,
        Bahia, Parana, Mato Grosso and Goias. CRBS' headquarters are in the
        Cebrasa plant in the state of Goias. CRBS is a shareholder of two
        subsidiaries of Brahma, Fazenda do Poco - Agricola e Florestamento
        S.A. and Gibral - Gestao e Trading Internacional S.A. AmBev controls,
        directly or indirectly, 94.8% of the voting and 99.8% of the total
        equity of this entity.

     o  Malteria Pampa S.A. and Malteria Uruguay S.A. (incorporated in
        Argentina and Uruguay, respectively). Malteria Pampa is a producer of
        malt in Argentina. Malteria Pampa owns Malteria Uruguay S.A., an
        Uruguayan malt-producing company. AmBev controls, directly or
        indirectly, 100% of the voting and 100% of the total equity of this
        entity.

     o  Pepsi-Cola Engarrafadora Ltda. (incorporated in Brazil). Engarrafadora
        produces and distributes Pepsi- Cola products. AmBev controls,
        directly or indirectly, 100% of the voting and 100% of the total
        equity of this entity.

     o  Antarctica Empreendimentos e Participacoes Ltda. - ANEP (incorporated
        in Brazil). ANEP is a holding company established in 1996 in
        connection with an Antarctica - Anheuser-Busch joint venture that was
        terminated in 1999. AmBev controls, directly or indirectly, 100% of
        the voting and 100% of the total equity of this entity.


                                       1


<PAGE>


     o  Industria de Bebidas Antarctica do Sudeste S.A. (incorporated in
        Brazil). Antarctica Sudeste produces beer and soft drinks and is
        responsible for sales in the southeast of Brazil, including the states
        of Minas Gerais, Espirito Santo and Rio de Janeiro. AmBev controls,
        directly or indirectly, 99.7% of the voting and 98.8% of the total
        equity of this entity.

     o  Industria de Bebidas Antarctica do Norte-Nordeste S.A. (incorporated
        in Brazil). Norte-Nordeste produces beer and soft drinks and its
        commercial area covers the entire north and northeast and part of the
        center-west of Brazil. AmBev controls, directly or indirectly, 82.9%
        of the voting and 64.5% of the total equity of this entity.

     o  Industria de Bebidas Antarctica - Polar S.A. (incorporated in Brazil).
        Polar produces beer and soft drinks, and its commercial area includes
        the states of Rio Grande do Sul, Santa Catarina and Parana, in the
        south of Brazil. AmBev controls, directly or indirectly, 97.37% of the
        voting and 96.22% of the total equity of this entity.

    AmBev has significant investments in the following companies:

     o  Cervejaria Miranda Correa S.A. (incorporated in 1999). Miranda Correa
        produces beer in Manaus, in the state of Amazonas. AmBev controls,
        directly or indirectly, 49.5% of the voting and 60% of the total
        equity of this entity.

     o  Fratelli Vita Bebidas Ltda. and Pilcomayo Participacoes S.A.
        (incorporated in Brasil). Pilcomayo is a holding company. AmBev owns
        50% of the total shares of Pilcomayo, which controls 100% of Fratelli
        Vita. Fratelli Vita produces the Fratelli Vita mineral water and
        Marathon isotonic sport drink.

     o  Ice Tea do Brasil Ltda. (incorporated in Brazil). Ice Tea do Brasil is
        a 50%-50% joint venture between Fratelli Vita and Industrias Gessy
        Lever Ltda., which produces, sells and distributes the Lipton brand
        iced tea in Brazil.

     o  Miller Brewing do Brasil Ltda. (incorporated in Brazil). Miller
        Brewing do Brasil is a 50%-50% joint venture between Brahma and the
        Miller Brewing Co. Miller Brewing do Brasil produces and sells Miller
        Genuine Draft beer in Brazil.


                                       2

<PAGE>

Companhia de Bebidas
das Americas - AmBev

Consolidated Financial Statements at
December 31, 2000 and 1999, and
for Each of the Three Years in the
Period Ended December 31, 2000


















Index to Consolidated Financial Statement                             Page

Report of Independent Accountants                                      F-2
Consolidated Balance Sheet                                             F-4
Consolidated Statement of Operations                                   F-7
Consolidated Statement of Cash Flows                                   F-9
Statements of Changes in Shareholders' Equity                          F-12
Notes to Financial Statements                                          F-17


<PAGE>

PriceWaterhouseCoopers [Logo]



Report of Independent Accountants

January 29, 2001, except as to Notes 1(b)(vii) and 21,
as to which the dates are February 15, 2001 and April
27, 2001, respectively

To the Board of Directors and Shareholders
Companhia de Bebidas das Americas - AmBev

In our opinion, based upon our audits and the report of other auditors, the
accompanying consolidated balance sheets and the related consolidated
statements of operations, of cash flows and of changes in shareholders' equity
present fairly, in all material respects, the financial position of Companhia
de Bedidas das Americas - AmBev and its subsidiaries at December 31, 2000 and
1999, and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 2000, in conformity with
accounting principles generally accepted in the United States of America.
These financial statements are the responsibility of the company's management;
our responsibility is to express an opinion on these financial statements
based on our audits. We did not audit the financial statements of Companhia
Antarctica Paulista - Industria Brasileira de Bebidas e Conexos
("Antarctica"), a wholly-owned subsidiary accounted for on the equity method
as of December 31, 1999 and for the period from July 1 to December 31, 1999.
The company's consolidated balance sheet as of December 31, 1999 reflects an
investment in Antarctica of US$ 24,482 thousand and the consolidated statement
of operations for the period from July 1 to December 31, 1999 includes equity
in losses of Antarctica of US$ 179,116 thousand. Those statements were audited
by other auditors whose report thereon has been furnished to us, and our
opinion expressed herein, insofar as it relates to the amounts included for
Antarctica for 1999, is based solely on the report of the other auditors. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits and the report of the other
auditors provide a reasonable basis for our opinion.

PricewaterhouseCoopers                                 Sao Paulo, Brazil
Auditores Independentes


                                     F-2


<PAGE>


                                                                      Deloitte
                                                                        Touche
                                                                      Tohmatsu


Report of Independent Auditors

To the Board of Directors and Shareholders of Companhia
Antarctica Paulista Industria Brasileira de Bebidas e
Conexos - Sociedade de Comando:

We have audited the accompanying consolidated balance sheets of Companhia
Antarctica Paulista Industria Brasileira de Bebidas e Conexos - Sociedade de
Comando and its subsidiaries as of December 31, 1999 and 1998, and the related
consolidated statements of operations, comprehensive loss, cash flows and
changes in shareholders' equity (deficit) for each of the three years in the
period ended December 31, 1999, all expressed in United States dollars. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the accompanying consolidated financial statements present
fairly, in all material respects, the financial position of Companhia
Antarctica Paulista Industria Brasileira de Bebidas e Conexos - Sociedade de
Comando and its subsidiaries as of December 31, 1999 and 1998, and the results
of their operations and their cash flows for each of the three years in the
period ended December 31, 1999, in conformity with accounting principles
generally accepted in the United States of America.


Deloitte Touche Tohmatsu                  Sao Paulo, Brazil
Auditores Independentes                   March 24, 2000, except as to Note 20
                                          which is dated as of June 6, 2000


                                     F-3


<PAGE>


Companhia de Bebidas das Americas - AmBev

Consolidated Balance Sheet
Expressed in thousands of United States dollars, except number of shares
--------------------------------------------------------------------------------


                                                                 December 31
                                                     ---------------------------



Assets                                               2000                 1999
                                                   -------------    ------------
                                                                 (reclassified)
                                                                 (Note 1(b)(v))

Current assets

    Cash and cash equivalents                        US$ 281,854    US$ 772,286
    Zerrenner Foundation - restricted cash                34,651
    Trading securities                                   231,608        157,145
    Trade accounts receivable, net                       359,530        159,148
    Advances to distributors and suppliers                 3,868          3,750
    Sales and income taxes recoverable                   116,178         97,375
    Inventories                                          301,844        210,460
    Prepaid expenses                                      18,005          9,168
    Deferred income tax                                   10,104          7,367
    Other                                                 55,639         30,816
                                                   -------------    ------------
                                                       1,413,281      1,447,515
                                                   -------------    ------------

Investments

    Investment in Antarctica (Note 1(b)(iv))                             24,482
    Investment in affiliates                              26,879         22,003
    Other                                                  9,950          5,840
                                                   -------------    ------------
                                                          36,829         52,325
                                                   -------------    ------------
Goodwill and intangible assets, net                      270,673         54,034
                                                   -------------    ------------
Property, plant and equipment, net                     1,472,545      1,022,786
                                                   -------------    ------------

Other assets

    Receivables from affiliated companies                 47,730         84,026
    Prepaid expenses                                      18,312
    Deferred income tax (Note 6)                         531,054         62,603
    Sales taxes recoverable                               20,748
    Brahma Welfare Foundation - restricted assets                        23,507
    Prepaid pension benefit cost                          19,796         21,663
    Restricted deposits for legal proceedings             51,386         23,892
    Tax incentive investments                             32,931         21,242
    Assets held for sale                                  23,933          7,386
    Other                                                 32,578         29,520
                                                   -------------  -------------
                                                         778,468        273,839
                                                   -------------  -------------
                                                   US$ 3,971,796  US$ 2,850,499
                                                   =============  =============


                                      F-4


<PAGE>


Companhia de Bebidas das Americas - AmBev
<TABLE>
<CAPTION>
<S>     <C>
Consolidated Balance Sheet
Expressed in thousands of United States dollars, except number of shares (continued)
------------------------------------------------------------------------------------
</TABLE>

                                                                     December 31
                                                   -----------------------------


Liabilities and shareholders' equity                      2000              1999
                                                   -----------    --------------
                                                                  (reclassified)
                                                                  (Note 1(b)(v))

Current liabilities
    Suppliers                                      US$ 293,817       US$ 173,733
    Payroll, profit sharing and related charges         59,016            48,156
    Taxes on sales                                     253,350           130,724
    Short-term debt                                    416,206           347,184
    Current portion of long-term debt                  201,932           227,185
    Interest attributed to shareholders' equity,
      gross of tax                                      72,060            52,727
    Other                                               69,685            55,009
                                                   -----------    --------------
                                                     1,366,066         1,034,718
                                                   -----------    --------------


Longterm liabilities
    Longterm debt                                      405,129           465,855
    Accrued liability for legal proceedings            310,979           163,309
    Sales tax deferrals and other tax credits          308,391           296,742
    Post-retirement benefits                            61,041
    Other                                               29,845            32,601
                                                   -----------    --------------
                                                     1,115,385           958,507
                                                   -----------    --------------

Minority interest                                      222,449            20,383
                                                   -----------    --------------


Commitments and contingencies (Note 18)




                                      F-5

<PAGE>

<TABLE>
<CAPTION>
<S>     <C>

Companhia de Bebidas das Americas - AmBev

Consolidated Balance Sheet
Expressed in thousands of United States dollars, except number of shares     (continued)
----------------------------------------------------------------------------------------
</TABLE>



                                                                     December 31
                                                   -----------------------------

                                                            2000            1999
                                                   -------------  --------------
                                                                  (reclassified)
                                                                  (Note 1(b)(v))

Shareholders' equity


Preferred shares - (22,669,744 thousand issued at
    December 31, 2000; December 31, 1999 -
    21,790,073 thousand)                             US$ 475,714    US$ 446,191
Common shares - (15,976,336 thousand issued at
    December 31, 1999  16,012,476 thousand)
    at December 31, 2000;                                156,344        482,181
Treasury shares - preferred                               (1,229)        (1,229)
Treasury shares - common                                  (5,381)        (2,926)
Treasury shares - preferred (held by the Zerrenner Foundation;
    1999 held by the Brahma Welfare Foundation)
                                                         (67,465)        (9,523)
Treasury shares - common (held by the Zerrenner Foudation;
    1999 held by the Brahma Welfare Foundation)
                                                        (449,125)       (32,477)
Additional paid-in capital                               525,776
Advances to employees for purchase of shares             (84,460)       (49,770)
Appropriated retained earnings                            12,023         89,449
Unappropriated retained earnings                       1,366,335        457,933
Cumulative translation adjustment                       (660,636)      (542,938)
                                                   -------------  -------------
                                                       1,267,896        836,891
                                                   -------------  -------------
                                                   US$ 3,955,184  US$ 2,850,499
                                                   =============  =============











The accompanying notes are an integral part of these consolidated financial
statements.


                                       F-6



<PAGE>

Companhia de Bebidas das Americas - AmBev

Consolidated Statement of Operations
Expressed in thousands of United States dollars, except number of shares
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
                                                                                       Years ended December 31
                                                       -------------------------------------------------------


                                                                2000                 1999                 1998
                                                       -------------        -------------        -------------
                                                                            (reclassified)       (reclassified)
                                                                            (Note 1(b)(v))
<S>                                                    <C>                  <C>                  <C>
Gross sales, net of discounts,
    returns and allowances                             US$ 5,671,415        US$ 3,689,885        US$ 5,933,040
       Value-added and excise tax on sales                (3,036,179)          (1,913,942)          (3,263,702)
                                                       -------------        -------------        -------------
Net sales                                                  2,635,236            1,775,943            2,669,338
      Cost of sales                                       (1,444,838)          (1,076,276)          (1,608,340)
                                                       -------------        -------------        -------------
Gross profit                                               1,190,398              699,667            1,060,998

    Selling and marketing expenses                          (384,367)            (263,839)            (573,759)
    General and administrative expenses                     (313,059)            (200,348)            (281,326)
    Other operating (expense) income, net                    (58,169)             (51,341)               3,476
                                                       -------------        -------------        -------------
Operating income                                             434,803              184,139              209,389

Non-operating income (expenses)
    Financial income                                         164,315              364,829              198,636
    Financial expenses                                      (310,212)            (442,245)            (289,504)
    Other non-operating (expense) income, net                   (901)              (8,448)              14,994
                                                       -------------        -------------        -------------
Income before income tax, equity in
    affiliates and minority interest                         288,005               98,275              133,515
                                                       -------------        -------------        -------------
Income tax benefit (expense)
    Current                                                 (102,037)              37,986               90,526
    Deferred                                                 489,277                3,402                2,170
                                                       -------------        -------------        -------------
                                                             387,240               41,388               92,696
                                                       -------------        -------------        -------------
Income before equity in affiliates
    and minority interest                                    675,245              139,663              226,211

     Equity in earnings of affiliates                         11,678                5,404                2,962
     Equity in losses of Antarctica (Note 1(b)(ii))          (49,879)            (179,116)
     Minority interest                                       (14,202)               3,498                9,404
                                                       -------------        -------------        -------------
Net income (loss)                                        US$ 622,842          US$ (30,551)         US$ 238,577
                                                       =============        =============        =============
Net income (loss) applicable to each class of shares
    Preferred                                                391,267              (19,529)             158,920
    Common                                                   231,575              (11,022)              79,657
                                                       -------------        -------------        -------------
    Net income (loss)                                    US$ 622,842          US$ (30,551)         US$ 238,577
                                                       =============        =============        =============
</TABLE>



                                     F-7



<PAGE>


Companhia de Bebidas das Americas - AmBev
<TABLE>
<CAPTION>
<S>     <C>
Consolidated Statement of Operations
Expressed in thousands of United States dollars, except number of shares      (continued)
-----------------------------------------------------------------------------------------
</TABLE>


<TABLE>
<CAPTION>
                                                                              Years ended December 31
                                                   --------------------------------------------------

                                                           2000               1999               1998
                                                   ------------      -------------      -------------
                                                                     (reclassified)     (reclassified)
                                                                     (Note 1(b)(v))
<S>                                                <C>              <C>                 <C>
Earnings (losses) per thousand AmBev shares
    Basic
       Preferred shares                               US$ 17.85          US$ (0.92)          US$ 7.32
       Common shares                                      16.23              (0.92)              6.65
    Diluted
       Preferred shares                                   17.18              (0.88)              6.94
       Common shares                                      15.62              (0.88)              6.31


2000 and 1999 - Weighted average AmBev shares
    outstanding (in thousands); 1998  weighted
    average Brahma shares outstanding
    (in thousands) - Note 16(j)


    Basic
       Preferred shares                              21,919,724         21,173,565         21,733,635
       Common shares                                 14,265,323         11,949,367         11,983,100
    Diluted
       Preferred shares                              23,090,525         22,384,145         23,058,784
       Common shares                                 14,475,271         12,206,392         12,433,243
</TABLE>














The accompanying notes are an integral part of these consolidated financial
statements.



                                      F-8


<PAGE>


Companhia de Bebidas das Americas - AmBev

Consolidated Statement of Cash Flows
Expressed in thousands of United States dollars
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                        Years ended December 31
                                                           ----------------------------------------------------

                                                                     2000                1999              1998
                                                           --------------      --------------    --------------
                                                                               (reclassified)    (reclassified)
                                                                               (Note 1(b)(v))
<S>                                                        <C>                 <C>               <C>
Cash flows from operating activities
Net income (loss)                                             US$ 622,842         US$ (30,551)      US$ 238,577
   Adjustments to reconcile net income (loss)
      to cash provided by operating activities
         Stock ownership plan                                       5,496               4,593             4,512
         Depreciation                                             243,358             228,690           254,628
         Amortization of goodwill and intangible assets            14,815               6,213             8,726
         Foreign exchange losses on loans, net                     62,067             238,515            83,400
         Gain on disposal of property, plant and
            equipment, net                                        (19,217)             (5,323)          (10,036)
         Impairment provision on property, plant and
            equipment to be held and used                          20,913               3,121
         Equity in earnings of affiliates                         (11,678)             (5,404)           (2,962)
         Equity in losses of Antarctica                            49,879             179,116
         Sales tax deferrals                                       27,689              65,252           145,489
         Deferred income tax benefit                             (489,277)             (3,402)           (2,170)
         Minority interest                                         14,202              (3,498)           (9,404)
         Other                                                      7,004             (14,032)             (951)
   (Increase) decrease in assets
      Trading securities                                          (76,082)            (12,638)          (45,451)
      Trade accounts receivable                                  (157,793)             15,982             9,804
      Advances to distributors and suppliers                      (37,139)             (6,821)          (10,978)
      Sale and income taxes recoverable                            13,895             (31,950)          (23,548)
      Inventories                                                  (2,724)             13,149             5,518
      Prepaid expenses                                              5,719               2,656            (1,024)
      Receivables from affiliated companies                        31,156             (35,618)          (34,428)
      Other                                                           (19)            (50,286)            8,452
   (Decrease) increase in liabilities
      Suppliers                                                   101,722              26,679           (14,404)
      Payroll, profit sharing and related charges                     874                (274)          (70,327)
      Income tax and social contribution                              603               7,273
      Taxes on sales                                               94,919              22,134            (8,554)
      Provision for post-retirement benefits                     (100,568)
      Accrued liability for legal proceedings, net
         of restricted deposits                                   135,625              16,004           (98,854)
      Other                                                       (43,449)            (8,547)            50,989
                                                           --------------      --------------    --------------
Net cash provided by operating activities                     US$ 514,832         US$ 621,033       US$ 477,004
                                                           --------------      --------------    --------------
</TABLE>



                                     F-9
<PAGE>


Companhia de Bebidas das Americas - AmBev

Consolidated Statement of Cash Flows
Expressed in thousands of United States dollars                      (continued)
--------------------------------------------------------------------------------




<TABLE>
<CAPTION>

                                                                                     Years ended December 31
                                                     -------------------------------------------------------

                                                              2000                 1999                 1998
                                                     -------------       --------------        -------------
                                                                          (reclassified)       (reclassified)
                                                                          (Note 1(b)(v))
<S>                                                  <C>                 <C>                   <C>
Cash flows from investing activities
   Investments in affiliates                           US$ (13,522)                               US$ (4,621)
   Other investments                                            24             US$ (345)                 357
   Property, plant and equipment                          (145,666)            (108,451)            (249,105)
   Proceeds on disposal of property, plant and
      equipment                                             79,251               29,097               83,870
   Intangible assets                                       (10,339)              (3,628)              (3,452)
   Proceeds on disposal of intangible assets                31,164
   Dividends received from affiliated companies              6,090                3,983
   Minorities - interest and dividends received
      (paid) of subsidiaries                                  (782)               2,716                6,798
   Payment for purchase of subsidiary, net of cash
      acquired                                                                                       (48,423)
                                                     -------------       --------------        -------------
Net cash used in investing activities                  US$ (53,780)         US$ (76,628)        US$ (214,576)
                                                     -------------       --------------        -------------
Cash flows from financing activities
   Loans with original maturities of less
      than 90 days, net                                US$ (35,350)          US$ (1,684)          US$ 41,902
   Short-term debt
      Issuances                                            157,374               87,888               14,172
      Repayments                                          (608,926)            (170,796)             (69,884)
   Long-term debt
      Issuances                                            133,216              134,049              251,863
      Repayments                                          (505,463)            (235,785)            (165,503)
   Capital subscriptions and contributions                  52,544                8,607               41,046
   Repurchase of treasury shares                            (8,306)              (6,377)            (137,638)
   Capital increase of minority interests in
      subsidiaries                                          13,841
   Return of capital                                       (61,105)
   Dividends and interest on equity paid                   (87,980)             (97,299)            (104,450)
                                                     -------------       --------------        -------------
Net cash used in financing activities                 US$ (950,155)        US$ (281,397)        US$ (128,492)
                                                     -------------       --------------        -------------
</TABLE>



                                     F-10



<PAGE>


Companhia de Bebidas das Americas - AmBev

Consolidated Statement of Cash Flows
Expressed in thousands of United States dollars                      (continued)
--------------------------------------------------------------------------------



<TABLE>
<CAPTION>

                                                                                     Years ended December 31
                                                     -------------------------------------------------------

                                                              2000                 1999                 1998
                                                     -------------       --------------        -------------
                                                                          (reclassified)       (reclassified)
                                                                          (Note 1(b)(v))
<S>                                                  <C>                 <C>                   <C>
Effect of exchange rate changes on cash                    (19,221)            (213,972)             (68,120)
                                                     -------------       --------------        -------------
Net increase (decrease) in cash and
   cash equivalents                                   US$ (508,324)          US$ 49,036           US$ 65,816

Cash and cash equivalents, at beginning of year            772,286              723,250              657,434

Cash from Antarctica, consolidated as
   of April 1, 2000                                         17,892
                                                     -------------       --------------        -------------
      Cash and cash equivalents at end of year         US$ 281,854          US$ 772,286          US$ 723,250
                                                     =============       ==============        =============

Supplemental disclosure of cash flow information

Cash paid during the year for
   Interest, net of capitalized interest               US$ 145,232          US$ 137,825          US$ 147,670
   Taxes on income                                      US$ 31,759            US$ 9,911           US$ 23,357

Supplemental disclosures of noncash investing
   and financing activities - Antarctica
   transaction (Note 20)

Purchase consideration paid for Antarctica                                  US$ 281,118
Investment in Antarctica                                                     US$ 24,482
Capital contribution - Zerrenner Foundation             US$ 12,126            US$ 3,575
</TABLE>





The accompanying notes are an integral part of these consolidated financial
statements.



                                     F-11





<PAGE>


Companhia de Bebidas das Americas - AmBev

Consolidated Statement of Changes in Shareholders'
Equity Expressed in thousands of United States dollars,
except number of shares and distributions to shareholders
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                                      Year ended December 31
----------------------------------------------------------------------------------------------------------------------------

                                                          2000                          1999                            1998
                                  ----------------------------  ----------------------------    ----------------------------
                                          Shares           US$          Shares           US$            Shares           US$
                                  --------------   -----------  --------------   -----------    --------------  ------------
                                                                (reclassified) (reclassifie)                    (reclassified)
                                                                (Note 1(b)(v)) (Note 1(b)(v)
<S>                               <C>              <C>          <C>              <C>            <C>             <C>
Share capital

Preferred shares
   At beginning of year           21,790,073,260   US$ 446,191  23,074,741,875   US$ 427,906    22,618,568,520   US$ 397,020
   Exercise of stock options         879,671,145        61,868     196,635,920        11,169       456,173,355        30,886
   Cancellation of shares                                       (1,821,855,000)      (33,785)
   Conversion of Controlling
      Shareholders of Antartica                                    267,843,425        32,132
   Antarctica Conversion on
     September 15, 1999                                             72,707,040         8,769
   Reduction in capital:
     January 17, 2000                                   (8,607)
     April 28, 2000                                     (6,747)
     September 22, 2000                                (11,468)
   Return of capital:
     March 23, 2000                                       (974)
     November 30, 2000                                  (4,549)
                                  --------------   -----------  --------------   -----------    --------------  ------------
   At end of year                 22,669,744,405   US$ 475,714  21,790,073,260   US$ 446,191    23,074,741,875   US$ 427,906
                                  ==============   ===========  ==============   ===========    ==============  ============

Common shares
   At beginning of year           16,012,476,195   US$ 482,181  13,337,282,340   US$ 244,516    13,531,872,340   US$ 239,718
   Exercise of stock options                                                                        97,875,000        10,160
   Cancellation of shares            (36,140,000)         (539)   (158,885,000)       (2,552)     (292,465,000)       (5,362)
   Conversion of Controlling
     Shareholders' of Antarctica                                 2,317,676,355       195,430
   Antarctica Conversion on
     September 15, 1999                                            516,402,500        44,787
   Reduction in capital:
     January 17, 2000                                  (86,552)
     April 28, 2000                                    (67,832)
     September 22, 2000                               (115,332)
   Return of capital:
     March 23, 2000                                     (9,805)
     November 30, 2000                                 (45,777)
                                  --------------   -----------  --------------   -----------    --------------  ------------
   At end of year                 15,976,336,195   US$ 156,344  16,012,476,195   US$ 482,181    13,337,282,340   US$ 244,516
                                  ==============   ===========  ==============   ===========    ==============  ============
</TABLE>






                                     F-12



<PAGE>


Companhia de Bebidas das Americas - AmBev

Consolidated Statement of Changes in Shareholders'
Equity Expressed in thousands of United States dollars,
except number of shares and distributions to shareholders        (continued)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                                      Year ended December 31
----------------------------------------------------------------------------------------------------------------------------

                                                          2000                          1999                            1998
                                  ----------------------------  ----------------------------    ----------------------------
                                          Shares           US$          Shares           US$            Shares           US$
                                  --------------   -----------  --------------   -----------    --------------  ------------
                                                                (reclassified) (reclassifie)                    (reclassified)
                                                                (Note 1(b)(v)) (Note 1(b)(v)
<S>                               <C>              <C>          <C>              <C>            <C>             <C>
Treasury shares
   Preferred shares
     At beginning of year            (53,726,500)   US$ (1,229) (1,864,371,500)  US$(204,646)     (826,691,500)  US$ (98,701)
     Repurchase of shares                                          (11,210,000)         (978)   (1,037,680,000)     (105,945)
     Cancellation of shares                                      1,821,855,000       204,395
                                  --------------   -----------  --------------   -----------    --------------  ------------
     At end of year                  (53,726,500)   US$ (1,229)    (53,726,500)   US$ (1,229)   (1,864,371,500) US$ (204,646)
                                  --------------   -----------  --------------   -----------    --------------  ------------
   Common shares
     At beginning of year            (36,140,000)   US$ (2,926)   (158,885,000)  US$ (17,750)     (206,320,000)  US$ (25,076)
     Repurchase of shares            (26,289,000)       (5,381)    (36,140,000)       (2,926)     (245,030,000)      (28,313)
     Cancellation of shares           36,140,000         2,926     158,885,000        17,750       292,465,000        35,639
                                  --------------   -----------  --------------   -----------    --------------  ------------
     At end of year                  (26,289,000)   US$ (5,381)    (36,140,000)   US$ (2,926)     (158,885,000)  US$ (17,750)
                                  --------------   -----------  --------------   -----------    --------------  ------------

AmBev treasury shares held by Zerrenner Foundation -
(1999/1998 Brahma Welfare Foundation) -  Notes 17(d)(e) and 2(m))

   AmBev Preferred shares
     At beginning of year           (171,052,200)  US$  (9,523)   (153,496,520)   US$ (6,384)     (100,015,745)   US$ (3,004)
     Purchase of shares              (31,271,040)       (2,925)    (17,555,680)         (928)      (53,480,775)       (3,380)
     Consolidation of
       Zerrenner Foundation         (269,343,425)      (55,017)
                                  --------------   -----------  --------------   -----------    --------------  ------------
     At end of year                 (471,666,665)  US$ (67,465)   (171,052,200)   US$ (7,312)     (153,496,520)   US$ (6,384)
                                  --------------   -----------  --------------   -----------    --------------  ------------
   AmBev Common shares
     At beginning of year         (1,323,696,770)  US$ (32,477) (1,304,446,770)  US$ (33,144)   (1,304,446,770)  US$ (33,144)
     Purchase of shares                                            (19,250,000)       (1,544)
     Consolidation of
       Zerrenner Foundation       (2,297,608,640)     (416,648)
                                  --------------   -----------  --------------   -----------    --------------  ------------
     At end of year               (3,621,305,410)  US$(449,125) (1,323,696,770)  US$ (34,688)   (1,304,446,770)  US$ (33,144)
                                  --------------   -----------  --------------   -----------    --------------  ------------

Total treasury shares

Preferred shares                    (525,393,165)  US$ (68,694)   (224,778,700)   US$ (8,541)   (2,017,868,020) US$ (211,030)
                                  ==============   ===========  ==============   ===========    ==============  ============
Common shares                     (3,647,594,410)  US$(454,506) (1,359,836,770)  US$ (37,614)   (1,463,331,770)  US$ (50,894)
                                  ==============   ===========  ==============   ===========    ==============  ============
</TABLE>






                                     F-13


<PAGE>

Companhia de Bebidas das Americas - AmBev

Consolidated Statement of Changes in Shareholders' Equity
Expressed in thousands of United States dollars,
except number of shares and distributions to shareholders         (continued)
------------------------------------------------------------------------------



<TABLE>
<CAPTION>
                                                                                                     Year ended December 31
                                                                           ------------------------------------------------

                                                                                  2000                1999             1998
                                                                           -----------       -------------    -------------
                                                                                             (reclassified)   (reclassified)
                                                                                             (Note 1(b)(v))
<S>                                                                        <C>               <C>              <C>
Additional paid-in capital
   Stock purchase warrants (issued, net of exercise) (Note 16 (a)(v))
     Preferred shares                                                       US$ 13,393          US$ 13,393       US$ 13,393
     Common shares                                                               7,218               7,218            7,218
                                                                           -----------       -------------    -------------
                                                                                20,611              20,611           20,611
                                                                           -----------       -------------    -------------
   Outstanding employee stock options (Note 16 (i))
     Preferred shares
        At beginning of year                                                    25,937              13,588           10,065
        Stock options granted, net of exercised                                (10,003)             12,349            3,523
                                                                           -----------       -------------    -------------
        At end of year                                                          15,934              25,937           13,588
                                                                           -----------       -------------    -------------

     Common shares
        At beginning of year                                                                         5,513            4,524
        Stock options granted, net of exercised                                                     (5,513)             989
                                                                           -----------       -------------    -------------
     At end of year                                                                                                   5,513
                                                                           -----------       -------------    -------------

   Other additional paid-in capital (Note 16 (b))
     At beginning of year                                                      435,706             256,734           91,265
     Capitalization of unappropriated retained earnings                                                                 534
     Pushdown of expenses paid-in by Zerrenner Foundation                       12,126               3,575
     Consolidation of Zerrenner Foundation                                     526,040
     Transfer from unappropriated retained earnings                                                175,397          164,935
                                                                           -----------       -------------    -------------
     At end of year                                                            973,872             435,706          256,734
                                                                           -----------       -------------    -------------
   Cancellation of treasury shares
     At beginning of the year                                                 (482,254)           (296,446)        (266,168)
     Cancellations                                                              (2,387)           (185,808)         (30,278)
                                                                           -----------       -------------    -------------
     At end of year                                                           (484,641)           (482,254)        (296,446)
                                                                           -----------       -------------    -------------
Total additional paid-in capital                                           US$ 525,776
                                                                           ===========       =============    =============
</TABLE>







                                     F-14



<PAGE>


Companhia de Bebidas das Americas - AmBev

Consolidated Statement of Changes in Shareholders' Equity
Expressed in thousands of United States dollars,
except number of shares and distributions to shareholders          (continued)
-------------------------------------------------------------------------------



<TABLE>
<CAPTION>
                                                                                                     Year ended December 31
                                                                           ------------------------------------------------

                                                                                  2000                1999             1998
                                                                           -----------       -------------    -------------
                                                                                             (reclassified)   (reclassified)
                                                                                             (Note 1(b)(v))
<S>                                                                        <C>               <C>              <C>
Advances to employees for purchase of shares

   At beginning of year                                                    US$ (49,770)        US$ (63,568)     US$ (48,480)
   Foreign exchange losses on advances                                           4,235              20,620
   Advances net of repayments                                                  (38,925)             (6,822)         (15,088)
                                                                           -----------       -------------    -------------
   At end of year                                                          US$ (84,460)        US$ (49,770)     US$ (63,568)
                                                                           ===========       =============    =============
Appropriated retained earnings
   Statutory reserve
     At beginning of year                                                   US$ 76,679         US$ 100,160       US$ 93,701
     Transfer from (to) unappropriated retained earnings                       (64,656)            (23,481)           6,459
                                                                           -----------       -------------    -------------
     At end of year                                                             12,023              76,679          100,160
                                                                           -----------       -------------    -------------

   Tax incentive reserve
     At beginning of year                                                       12,770              18,901           18,696
     Transfer from (to) unappropriated retained earnings                       (12,770)             (6,131)             205
                                                                           -----------       -------------    -------------
     At end of year                                                                                 12,770           18,901
                                                                           -----------       -------------    -------------
   Interest attributed to shareholders' equity
     At the beginning of year                                                                                        40,628
     Transfer to unappropriated retained earnings                                                                   (40,628)
                                                                           -----------       -------------    -------------

     At end of year
                                                                           -----------       -------------    -------------

Total appropriated retained earnings                                        US$ 12,023          US$ 89,449      US$ 119,061
                                                                           ===========       =============    =============
</TABLE>






                                      F-15



<PAGE>


Companhia de Bebidas das Americas - AmBev

Consolidated Statement of Changes in Shareholders' Equity
Expressed in thousands of United States dollars,
except number of shares and distributions to shareholders       (continued)
--------------------------------------------------------------------------------



<TABLE>
<CAPTION>
                                                                                                     Year ended December 31
                                                                           ------------------------------------------------

                                                                                  2000                1999             1998
                                                                           -----------       -------------    -------------
                                                                                             (reclassified)   (reclassified)
                                                                                             (Note 1(b)(v))
<S>                                                                      <C>                 <C>              <C>
Unappropriated retained earnings
   At beginning of year                                                    US$ 457,933         US$ 744,563      US$ 818,540
   Net income (loss)                                                           622,842             (30,551)         238,577
   Distributions declared (per thousand shares)
     Dividends                                                                                                      (15,440)
        Preferred shares - (1998 - US$ 0.47)
        Common shares - (1998 - US$ 0.43)
     Interest attributed to shareholders' equity                               (88,404)           (110,294)        (165,609)
        Preferred shares - (2000: US$ 2.52; 1999 - US$ 3.44;
          1998 - US$ 5.08)
        Common shares - (2000: US$ 2.29; 1999 - US$ 3.13;
          1998 - US$ 4.61)
   Transfer following reduction of capital                                     296,538
   Transfer from appropriated retained earnings                                 77,426              29,612           33,964
   Transfer to additional paidin capital                                                          (175,397)        (165,469)
                                                                         -------------       -------------    -------------
   Total unappropriated retained earnings                                US$ 1,366,335         US$ 457,933      US$ 744,563
                                                                         =============       =============    =============
Cumulative translation adjustment
   At beginning of year                                                   US$ (542,938)       US$ (110,145)
   Deferred tax liability (Note 2(b))                                                                            US$ (8,016)
   Net translation loss in the year                                           (117,698)           (432,793)        (102,129)
                                                                         -------------       -------------    -------------
   At end of year                                                         US$ (660,636)       US$ (542,938)    US$ (110,145)
                                                                         -------------       -------------    -------------
Total shareholders' equity                                               US$ 1,267,896         US$ 836,891    US$ 1,100,409
                                                                         =============       =============    =============


Comprehensive income (loss)
Net income (loss)                                                          US$ 622,842         US$ (30,551)     US$ 238,577
Cumulative translation adjustment                                             (117,698)           (432,793)        (110,145)
                                                                         -------------       -------------    -------------
Comprehensive income (loss)                                                US$ 505,144        US$ (463,344)     US$ 128,432
                                                                         =============       =============    =============
</TABLE>



The accompanying notes are an integral part of these consolidated financial
statements.


                                     F-16



<PAGE>

Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
--------------------------------------------------------------------------------


1        Our group and operations

(a)      Our business and the formation of AmBev

          Companhia de Bebidas das Americas ("AmBev" or "we") is a Brazilian
          limited liability company. We, together with our subsidiaries,
          including Companhia Cervejaria Brahma (Brahma) and Companhia
          Antarctica Paulista Industria Brasileira de Bebidas e Conexos
          (Antarctica), produce, distribute and sell beer, soft drinks and
          other noncarbonated beverages, such as isotonic sport drinks, fruit
          juices, teas and mineral waters, in Brazil and other South American
          countries.

          On July 1, 1999, the controlling shareholders of Brahma and the
          controlling shareholders of Antarctica announced a business
          combination. The combination involved the formation of AmBev, a
          holding company to which we contributed shares of Brahma and
          Antarctica. The combination of Brahma, the predecessor to AmBev for
          accounting purposes, and Antarctica was accounted for using the
          purchase method. The completion of the combination required the
          approval of Brazilian antitrust authorities; interim restrictions
          imposed by the antitrust resulted in not consolidating Antarctica
          until that approval was obtained. However, because we exercised
          significant influence over Antarctica, we accounted for our 100%
          interest in Antarctica under the equity method for the period
          between July 1, 1999 and March 31, 2000.

          On September 15, 1999 all the non-controlling shareholders of
          Antarctica exchanged their shares of Antarctica for shares of AmBev
          (the "Antarctica conversion"), resulting in AmBev owning all
          outstanding Antarctica shares. On April 7, 2000, the Brazilian
          antitrust authorities approved the combination. On September 14,
          2000, all remaining outstanding shares of Brahma not yet exchanged
          for AmBev shares were converted into shares of the same type and
          class of AmBev.

          On October 27, 2000, we legally merged the Brahma Welfare Foundation
          into the Zerrenner Foundation, which provide employee benefits and
          are shareholders of AmBev. Consistent with the accounting treatment
          applied to the Brahma Welfare Foundation, because of the significant
          influence AmBev exerts over the investing decisions of the Zerrenner
          Foundation, the net assets of the Zerrenner Foundation have been
          consolidated in AmBev's balance sheet (Note 2(m)). As a substantial
          part of these assets are represented by shares in AmBev, these
          shares have been reflected as treasury shares thereby reducing the
          number of outstanding shares (Note 16(j)).

          On December 31, 2000, AmBev owned 100% of the voting shares and 100%
          of the total shares of Brahma (December 31, 1999 - 55.1% of the
          voting shares and 21.2 of the total shares of Brahma).



                                     F-17
<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
--------------------------------------------------------------------------------



(b)      Significant acquisitions and dispositions

(i)      The combination of Brahma and Antarctica

          The combination involved three steps:

     .    On July 1, 1999, the controlling shareholders of Brahma and
          Antarctica contributed their preferred and common shares in their
          respective investees in exchange for shares of the same type and
          class of AmBev (the "Controlling Shareholders' Contribution"). AmBev
          became the owner of 88.1% of the voting (common) shares and 87.9% of
          the total shares of Antarctica and 55.1% of the voting (common)
          shares and 21.2% of the total shares of Brahma. Each share of Brahma
          was exchanged for one share of the same type and class of AmBev, and
          each share of Antarctica was exchanged for 48.6361 shares (without
          adjustment for the fiveforone stock split (Note 16 (a) (ii)) of the
          same type and class of AmBev.

     .    On September 15, 1999 the remaining non-controlling shareholders of
          Antarctica exchanged their shares of Antarctica for shares of AmBev
          (the "Antarctica Conversion"). Upon consummation of this
          transaction, Antarctica became a whollyowned subsidiary of AmBev.
          Each such share of Antarctica was exchanged for 84 shares (without
          adjustment for the fiveforone stock split (Note 16 (a) (ii)) of the
          same type and class of AmBev shares.

     .    On September 14, 2000, the remaining Brahma non-controlling shares
          which include shares underlying American Depositary Receipts "ADRs"
          were converted (the "Brahma Conversion") into the same type and
          class of AmBev shares following the registration of the preferred
          and common shares of AmBev with the U.S. Securities and Exchange
          Commission "SEC". Each share of Brahma was exchanged for one share
          of the same type and class of AmBev. Upon conversion of these
          shareholders, AmBev increased its ownership percentage in Brahma to
          100% and became the successor to Brahma for purposes of the U.S.
          Securities Exchange Act of 1934.

          On September 15, 2000, AmBev's shares were listed on the New York
          Stock Exchange through its American Depositary Receipt program in
          which one ADR represents 100 preferred shares or common shares of
          AmBev. On September 15, 2000, Brahma's shares were delisted at the
          request of Brahma by the New York Stock Exchange.



                                     F-18



<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
--------------------------------------------------------------------------------


          The combination of Brahma, the predecessor to AmBev, and Antarctica
          was accounted for using the purchase method as defined by U.S.
          Accounting Principles Board opinion (APB) No. 16, "Business
          Combinations", in which AmBev was the accounting acquirer. An
          acquisition date as defined by APB No. 16 was not obtained until
          April 7, 2000, the date the Conselho Administrativo de Defesa
          Economica ("CADE"), the antitrust authority as described below,
          approved the Controlling Shareholders' Contribution and the interim
          governmental restrictions ceased to apply, allowing the two
          companies to proceed with their integration. For the same reasons,
          AmBev did not have a controlling financial interest in Antarctica as
          defined by Statement of Financial Accounting Standards (SFAS) No.
          94, "Consolidation of all Majority-Owned Subsidiaries" until April 7,
          2000. Although we did exercise significant influence over Antarctica
          we believed that the restrictions in place through April 7, 2000
          were sufficient to preclude consolidation. We accounted for our
          interest in Antarctica under the equity method for the period
          between July 1, 1999 and March 31, 2000.

          Once we received the favorable ruling from the antitrust
          authorities, we consolidated our investment in Antarctica as of
          April 1, 2000. The first quarter results of Antarctica are shown
          according to the equity method. The comparative statement of
          operations and cash flow financial information for the year ended
          December 31, 1998 is that of Brahma, the predecessor of AmBev.

(ii)      The antitrust authority review and ruling

          On July 14, 1999, the Brazilian antitrust authority, issued an
          interim order in connection with the Controlling Shareholders'
          Contribution. Under this order, CADE determined that until such time
          as it announced its final decision, Brahma and Antarctica could not
          take actions that might have the effect of changing the structure,
          conditions or characteristics of their markets in a manner which, if
          later reversed, might cause material irreparable adverse
          consequences. In particular, the interim order prohibited the
          following actions by Brahma and Antarctica, and established a daily
          fine for non-compliance: (i) closing down or partially deactivating
          plants; (ii) laying off employees as part of an integration
          strategy; (iii) ceasing to use trademarks or other assets; (iv)
          changing sales and distribution structures and practices; (v)
          changing contractual relationships with third parties; (vi)
          integrating administrative structures; or (vii) adopting uniform
          commercial policies.



                                     F-19



<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
--------------------------------------------------------------------------------


          On April 7, 2000, the CADE approved the combination between Brahma
          and Antarctica. On April 19, 2000, AmBev entered into an agreement
          with CADE in which AmBev agreed to fulfil all requirements of the
          CADE ruling. The main requirements are as follows:

     .    AmBev was required to enter into an agreement with a single
          purchaser, by January 1, 2001 for (a) the sale of Antarctica's
          Bavaria brand; (b) the sale to the Bavaria purchaser of one beer
          plant in each of five different Brazilian regions; and (c) the
          sharing of its distribution network with the Bavaria purchaser for a
          period of four years, renewable for an additional two-year period.
          The purchaser must be a company with a market share of no more than
          5% of the Brazilian beer market. Two of the plants to be sold were
          Antarctica's plants: one is located in Getulio Vargas, in the state
          of Rio Grande do Sul, and the other is in Ribeirao Preto, in the
          state of Sao Paulo. The sale was required to include equipment for
          the production of cans in the Ribeirao Preto plant. Three of the
          plants to be sold were Brahma's plants located in the states of Mato
          Grosso, Bahia and Amazonas. The Amazonas plant belonged to Miranda
          Correa, an affiliate of Brahma.

     .    For a period of four years, AmBev must share its distribution
          network with one beer company (besides the Bavaria brand acquirer)
          in each of five different regions of Brazil.

     .    For a period of four years, if AmBev decides to close or dispose of
          any of its beer plants, it must first promote a public bid for the
          sale of such plant.

     .    For a period of five years, AmBev must maintain its employment
          levels. If AmBev dismisses any employees under the restructuring
          process relating to the combination, it must attempt to place the
          employees within the AmBev group and provide them with employment
          retraining.

     .    After a six-month period as from April 7, 2000, AmBev and its
          distributors could not generally demand that their points-of-sales
          work on an exclusive basis.

          The agreement with CADE has a term of five years.



                                     F-20




<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
--------------------------------------------------------------------------------


     (iii) The sale of the Bavaria brand

          Under the CADE ruling, we were required to dispose of five plants
          one of which is owned by our affiliate Miranda Correa. On October 1,
          2000 we incorporated Bavaria S.A ("Bavaria S.A.") to which we
          contributed all five plants to be sold.

          On November 6, 2000, we agreed to sell Bavaria S.A. to Molson Inc.
          ("Molson"), a Canadian corporation pursuant to Distribution and
          Stock Purchase Agreements . These agreements became effective five
          days after CADE's approval of the sale which was granted on December
          20, 2000.

          The purchase consideration, which includes the proceeds which our
          affiliated company Miranda Correa received, was US$ 213,000 (US$
          200,635 excluding Miranda Correa proceeds) of which US$ 98,000 (US$
          92,311 excluding Miranda Correa proceeds) was to be paid by Molson
          on December 22, 2000. A discount of US$ 3,600 (US$ 3,468 excluding
          Miranda Correa proceeds) was applied to the first installment to
          reflect the fact that Bavaria's market share was below 4% at
          December 31, 2000 which, pursuant to the Distribution and Stock
          Purchase agreement, reduced the consideration received to US$ 94,400
          (Note 11). The balance of US$ 115,000 is a contingent consideration,
          which has not been recorded at December 31, 2000, payable by Molson
          to AmBev subject to the Bavaria brand attaining specified minimum
          market shares, as measured by AC Nielsen, an independent market
          research firm. A minimum market share of the Bavaria brand of 6.5%,
          in addition to intermediary targets, must be attained by 2005 to
          assure receipt of the full contingent price.

          For any of the years from 2001 to 2005, AmBev will receive US$
          23,000 upon increase of each 0.5% market share per year above 4.0%.
          In the event that the minimum target average market share of 4.5% is
          not attained in any of the years through 2005, AmBev will not be
          entitled to any balance of the purchase price.

          Pursuant to the CADE requirement, AmBev is required to provide
          Molson with use of its distribution systems to distribute Bavaria
          products for a six-year period for which AmBev will be reimbursed at
          cost. This period may be extended, at Molson's option, by four
          years, in which case remuneration will be at cost plus a royalty
          fee.



                                     F-21



<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
--------------------------------------------------------------------------------


(iv)     The Antarctica transaction

          AmBev's consolidated financial information as of and for the year
          ended December 31, 2000 reflects our consolidated interest in
          Antarctica and the related purchase accounting adjustments
          associated with the purchase of Antarctica as of July 1, 1999.

          Antarctica was listed on the Brazilian stock exchanges until
          September 14, 1999. On January 18, 2000, the Brazilian Securities
          Commission ("CVM") approved the cancellation of the registration of
          Antarctica as a publicly listed company, and on January 27, 2000 the
          Sao Paulo Stock Exchange ("BOVESPA") approved the delisting of the
          Antarctica shares.

          Our equity investment in Antarctica as of and for the year ended
          December 31, 1999 was recorded as follows:


                                                                     July 1,1999
                                                            --------------------

          Purchase consideration(1)                                 US$ 281,118
          Antarctica's shareholders' equity                             (51,536)
                                                            --------------------
          Excess purchase consideration                             US$ 229,582
                                                            ====================


          The excess purchase consideration over the historical book value of
          the net assets acquired and liabilities assumed, net of tax of US$
          229,582 was allocated to identifiable tangible and intangible assets
          as follows:


          Allocation of excess purchase price consideration:
            Tangible assets - Property, plant and equipment          US$ 72,737
            Trademarks                                                  175,000
            Distribution networks                                        50,000
            Software                                                      7,607
            Book versus tax temporary difference at date
            of acquisition                                              (75,762)
                                                                 --------------
                                                                    US$ 229,582
                                                                 ==============


          The fair value allocated to tangible assets is being depreciated
          over an estimated average useful life of 10 years; the fair value
          allocated to trademarks is being depreciated over 40 years, the
          distributors network over 30 years and the software over 5 years.




                                     F-22



<PAGE>
Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
--------------------------------------------------------------------------------



                                                               December 31, 1999
                                                            --------------------

Balance sheet
Antarctica's shareholders' equity at December 31, 1999            US$ (201,350)
Excess purchase consideration at July 1, 1999                          229,582
Depreciation of fair value of property, plant and equipment             (3,637)
Amortization of fair value of intangible assets                         (1,960)
Income tax effect on depreciation and amortization                       1,847
                                                            --------------------
Investment in Antarctica                                            US$ 24,482
                                                            ====================


Statement of operations
Antarctica loss (six month-period ended December 31,1999)         US$ (175,366)
Depreciation of fair value of property, plant and equipment             (3,637)
Amortization of fair value of intangible assets                         (1,960)
Income tax effect on depreciation and amortization                       1,847
                                                            --------------------
Equity in losses of Antarctica                                    US$ (179,116)
                                                            ====================

(1) The purchase consideration calculation for Antarctica shares is set forth
below. The number of shares are not adjusted for the fiveforone stock split
(Note 16 (a)(ii)).


<TABLE>
<CAPTION>
                                                                                                      Total shares (1)
Determination of shares                                             Preferred           Common         (in thousands)
------------------------------------------------------------        --------------   --------------   ----------------
<S>                                                                 <C>              <C>              <C>
Antarctica shares held by controlling shareholders
   at July 1, 1999                                                      1,102            9,448             10,550
Antarctica shares held by non-controlling
   shareholders at July 1, 1999                                           173            1,277              1,450
                                                                    --------------   --------------   ---------------
                                                                        1,275           10,725             12,000
Non-controlling shareholders who exercised their
   dissenters' rights during Antarctica Conversion                                         (24)               (24)
                                                                    --------------   --------------   ---------------
                                                                        1,275           10,701             11,976
                                                                    ==============   ==============   ===============
AmBev shares issued during Controlling Shareholders'
         Contribution - Exchange ratio 48.6361 (1)                     53,569          459,522            513,091

AmBev shares issued during Antarctica Conversion -
   Exchange ratio 84 (1)                                               14,541          103,281            117,822
                                                                    --------------   --------------   ---------------
   Total AmBev shares issued upon exchange
    of the Antarctica shareholders                                     68,110          562,803            630,913
                                                                    ==============   ==============   ===============
</TABLE>




                                     F-23



<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
--------------------------------------------------------------------------------



<TABLE>
<CAPTION>
                                                                  AmBev shares
                                                                   issued upon
                                                               exchange of the        Price per             Total
                                                                    Antarctica         thousand          purchase
Determination of purchase consideration                           shareholders    Shares (1) (2)    consideration
------------------------------------------------------------   ---------------    -------------     -------------
<S>                                                           <C>                 <C>               <C>
Common AmBev shares issued during
    Controlling Shareholders' Contribution on
    July 1, 1999                                                       459,522       US$ 0.4253       US$ 195,430
Preferred AmBev shares issued during
    Controlling Shareholders' Contribution
    on July 1, 1999                                                     53,569           0.5998            32,132
Common AmBev shares issued during the
    Antarctica Conversion on September 15, 1999                        103,281           0.4336            44,787
Preferred AmBev shares issued during the
    Antarctica Conversion on September 15, 1999                         14,541           0.6030             8,769
                                                               ---------------    -------------     -------------
                                                                       630,913                        US$ 281,118
                                                               ---------------    -------------     -------------
</TABLE>


(1)  Exchange Ratios: Each share of Antarctica was converted into 48.6361
     shares of the same type and class of AmBev, in connection with the
     contribution by the controlling shareholder of Antarctica. Under the
     Antarctica Conversion, each share of Antarctica was converted into 84
     shares of the same type and class of AmBev. The number of shares are not
     adjusted for the fiveforone stock split (Note 16 (a) (ii)).

(2)  Price per thousand shares: To determine the purchase price for the
     Antarctica shares acquired from the controlling shareholder of Antarctica
     (Fundacao Antonio e Helena Zerrenner Instituicao Nacional de
     Beneficiencia ("Zerrenner Foundation")), AmBev used the average closing
     price of the Brahma shares for a reasonable period of time before and
     after the combination was announced. In respect to the non-controlling
     shareholders of Antarctica, AmBev used the average closing price of the
     Brahma shares for a reasonable time before and after the date of the
     change of the exchange ratio for such shareholders.

Summarized financial information for our wholly-owned subsidiary Antarctica as
at and for the three-month period ended March 31, 2000 and the year ended
December 31, 1999, prior to consolidation on April 1, 2000, is provided below:




                                     F-24



<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
--------------------------------------------------------------------------------




                                                  March 31,        December 31,
                                                       2000                1999
                                               ------------       -------------

          Current assets                        US$ 347,938         US$ 387,157
          Non-current assets                        917,561             901,048
          Current liabilities                     1,020,522           1,016,008
          Non-current liabilities                   286,206             286,664
          Minority interest                         205,508             186,883


          Net sales                                 198,839             750,369
          Gross profit                               68,140             247,992
          Loss for the quarter/ year            US$ (49,879)       US$ (440,920)



          On April 28, 2000 the former shareholders of Antarctica approved a
          dividend which had been proposed during 1998 by management in
          relation to the results of the six-month period ended June 30, 1999.
          As these amounts had not been approved and therefore declared by the
          shareholders at that date, no provision had been made in the
          Antarctica balance sheet for purposes of purchase accounting.
          Accordingly, the dividend in the amount of US$ 16,012 was adjusted
          in 2000 by incrementing goodwill on the combination.

(v)      The Brahma conversion

          At the Brahma's Extraordinary Shareholders' Meeting, which took
          place on September 14, 2000, Brahma common shareholders approved a
          corporate transaction defined under Brazilian Corporation Law as
          "incorporacao de acoes", by which all outstanding shares of Brahma
          not yet exchanged for AmBev shares were converted into shares of the
          same type and class of AmBev shares. At the AmBev's Extraordinary
          Shareholders' Meeting, which took place on September 14, 2000, AmBev
          common shareholders approved the Brahma Conversion.

          At December 31, 1999, 78.8% of Brahma's total shares (representing
          44.9% of the common voting shares and 99.6% of the preferred shares)
          had not yet been exchanged for AmBev shares. The 1999 financial
          statements previously presented reflected shareholders' equity
          pertaining to these Brahma shareholders in the balance sheet caption
          as "Brahma shareholders that had not yet converted their shares to
          AmBev shares" (a component of mezzanine equity outside the AmBev
          Shareholders' equity section) and their portion of income was
          presented in the statement of operations caption "Allocation of net
          income of Brahma to Brahma shareholders that had not yet converted
          their shares into AmBev shares".




                                 F-25


<PAGE>
Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
--------------------------------------------------------------------------------



          Following the conversion of all remaining Brahma shares to AmBev
          shares on September 14, 2000, the 1999 balance sheet and income
          statement, as previously presented, have been restated to reflect
          the financial position and results of operations as though all
          Brahma shareholders had exchanged their shares for AmBev shares in
          1999.

          These balances, prior to reclassification and prior to the
          five-for-one stock split, at December 31, 1999 had previously been
          presented as follows:

<TABLE>
<CAPTION>
                                                                 Total          Brahma shareholders who               Brahma
                                                         shareholders'       exchanged their shares for     shareholders not
                                                      equity of Brahma     AmBev shares on July 1, 1999        yet converted
                                                     -----------------     ----------------------------     ----------------
<S>                                                  <C>                   <C>                              <C>
          Preferred shares                                US$ 405,290                       US$ (1,353)         US$ 403,937

          Common shares                                       241,964                         (184,725)              57,239

          Preferred Treasury shares                           (26,469)                                              (26,469)

          Common Treasury shares                             (127,972)                                             (127,972)

          Advances to Brahma employees for
              purchase of shares                              (49,770)                                              (49,770)

          Appropriated retained earnings                       89,449                                                89,449
          Unappropriated retained earnings                    606,572                         (274,014)             332,558

          Net income                                          184,752                          (39,095)             145,657
          Accumulated other comprehensive
              income                                         (472,262)                          99,934             (372,328)
                                                     ----------------                     ------------      ---------------
                                                          US$ 851,554                     US$ (399,253)         US$ 452,301
                                                     ================                     ============      ===============
</TABLE>


(vi)      The Salus transaction

          On October 6, 2000, AmBev, together with Groupe Compagnie Gervais
          Danone, acquired the controlling share in Compania Salus S.A., an
          Uruguayan beer and mineral water producer. AmBev acquired a 15.1%
          interest in the voting capital of the investee for a purchase
          consideration of US$ 11,400 generating goodwill of US$ 10,800. In
          1999, Salus generated net sales revenue of approximately US$ 30,000
          (unaudited). The goodwill recorded on the acquisition is being
          amortized over 10 years.



                                     F-26



<PAGE>
Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
--------------------------------------------------------------------------------




(vii)     The Cympay transaction

          On November 24, 2000, AmBev entered into a purchase commitment
          agreement with the shareholders of 95.4% of the voting capital of
          Cerveceria y Malteria Paysandu S.A-Cympay, an Uruguayan beer
          producer, to purchase their interest. The acquisition was
          consummated on February 15, 2001 for a purchase consideration of US$
          27,700.

(viii)    The Malteria Pampa transaction

          In April 1998, adding to our 40% interest, we purchased a further
          20% interest in the voting capital of our equity investee, Malteria
          Pampa S.A. for US$ 18,060, increasing our share to 60%, and on
          August 27, 1998, we purchased the remaining 40% for US$ 34,700. The
          purchase price exceeded the fair value of assets acquired and
          liabilities assumed by US$ 33,094, which is being amortized over the
          useful lives of these assets, a period which does not exceed 40
          years.

(c)       Our joint ventures and licensing agreements

          Companies in Brazil are generally permitted to implement
          transactions that require antitrust review without submitting the
          relevant transaction to the prior review of the authorities and
          without suspending or delaying the effectiveness of the transaction.
          The acquisitions described above were not subject to restrictions by
          the CADE which would have prevented us from controlling the acquired
          companies, limiting our interests by granting minority partner
          participating rights or otherwise restricting the planned
          consummation of the transaction. The CADE has powers to investigate
          any transaction which results in the concentration of a market share
          greater than 20% of any relevant market, among other factors.

          In 1997, we entered into a franchise agreement with PepsiCo
          International Inc. ("PepsiCo") to bottle, sell and distribute Pepsi
          products in an area covering the south, southeastern and
          northeastern regions of Brazil. Pepsi Cola Engarrafadora Ltda. and
          PCE Bebidas Ltda. were acquired on October 22, 1997. In October
          1998, CADE approved our production and distribution agreements of
          Pepsi products.

          On October 9, 2000, we consummated a new franchise agreement with
          PepsiCo. This agreement has an initial term of 17 years and may be
          renewed for additional ten-year period. The agreement can be
          terminated by either party upon advance notice of at least two years
          prior to the expiration.



                                     F-27


<PAGE>
Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
--------------------------------------------------------------------------------




          On October 20, 1999, we entered into a memorandum of understanding
          with PepsiCo , pursuant to which it agreed to license or sell
          Antarctica's leading soft drink product, Guarana Antarctica, for
          bottling, sale and distribution by PepsiCo outside of Brazil. AmBev
          and PepsiCo have generally agreed on the specific terms and
          conditions of such licensing or sale of guarana concentrate or
          guarana soft drink, but final negotiations were postponed until the
          CADE approval. In 1999, we renegotiated our agreement with PepsiCo
          and became PepsiCo's sole bottler and distributor in Brazil.

          In 1997, Skol entered into a licensing agreement with Carlsberg A/S
          ("Carlsberg ") to acquire the license to begin the production of
          Carlsberg beer in Brazil for sale and distribution throughout South
          America. In June 1999, the CADE approved the licensing agreement.

          In 1997, we entered into a joint venture with Industrias Gessy Lever
          Ltda., in which we each have an equal participation in the capital
          of Ice Tea do Brasil Ltda. In December 1998, the CADE approved the
          joint venture.

          In 1996, Antarctica entered into an agreement with Anheuser-Busch
          International, Inc. and Anheuser-Busch Holdings, Inc. (collectively
          "Anheuser-Busch"), in which Antarctica agreed to establish Antarctica
          Empreendimentos e Participacoes Ltda. ANEP, to facilitate the
          investment by Anheuser-Busch in the Antarctica group companies. Under
          the Antarctica-Anheuser-Busch joint venture, Antarctica distributed
          Budweiser beer in Brazil and Anheuser-Busch agreed to assist
          Antarctica in the sale of its products outside of Brazil. On July
          29, 1999, Anheuser-Busch exercised its contractual put option in
          accordance with the joint venture agreement and sold its interest in
          ANEP to Antarctica for US$ 64,600, and ANEP became a whollyowned
          subsidiary of Antarctica. Antarctica and Anheuser-Busch thus
          terminated their joint venture.

          In 1995, Brahma entered into a joint venture with Miller Brewing Co.
          USA to distribute Miller products in Brazil, in which we each have
          an equal participation in the capital of Miller Brewing do Brasil
          Ltda. In May 1998, the CADE approved the joint venture.


                                     F-28



<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
--------------------------------------------------------------------------------

(d)       Our group consolidation principles

          The consolidated financial statements include our accounts of AmBev,
          Brahma, Antarctica, Zerrenner Foundation (Note 2 (m)) and those of
          the companies listed below. All significant intercompany accounts and
          transactions are eliminated. Direct and indirect ownership percentages
          of the capital of significant subsidiary companies at December 31 are
          presented below:


                                                                               %
                                                                ----------------
Consolidated subsidiaries                                       2000  1999  1998
----------------------------------------------------------      ----  ----  ----

Antarctica Empreendimentos e Participacoes
    Ltda. - ANEP (i)                                             100
Arosuco Aromas e Sucos S.A. (ii)                                 100        99.4
Brahmaco International Ltd.                                      100   100   100
CA Cervecera Nacional (iii)                                     50.2  50.2  50.2
CCBA S.A                                                        70.0  70.0  70.0
CCB Paraguay S.A                                                 100   100   100
Cervejaria Aguas Claras S.A                                     93.3  93.3  96.3
Cervejarias Reunidas Skol Caracu S.A. ("Skol")                  99.7  99.7  99.9
Companhia Antarctica Paulista - Industria
    Brasileira de Bebidas e Conexos (i)                          100
CRBS S.A. ("CRBS") (iv)                                         99.8  99.7  99.7
Dahlen S.A                                                       100   100   100
Distribuidora de Bebidas Antarctica de Manuas Ltda. (i)          100
Eagle Distribuidora de Bebidas S.A                               100   100   100
Gibral Trading e Participacoes S.A                               100   100   100
Hohneck S.A. (v)                                                 100   100
Industria de Bebidas Antarctica do Sudeste S.A. (i)             98.8
Industria de Bebidas Antarctica do Norte-Nordeste S.A. (i)      61.8
Industria de Bebidas Antarctica do Polar S.A. (i)               59.0
Jalua S.A                                                        100   100   100
Mahler Investment Ltd.                                           100   100   100
Malteria Pampa S.A                                               100   100   100
Panaro S.A. (vi)                                                             100
Pepsi Cola Engarrafadora Ltda. ("Pepsi")                         100   100   100
Universal Breweries Limited                                     51.0  51.0  51.0


                                     F-29


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
--------------------------------------------------------------------------------


(i)    Antarctica subsidiaries consolidated as of April 1, 2000.

(ii)   Arosuco Aromas e Sucos S.A. was formed in 1999, upon a carve-out of its
       operation from Miranda Correa S.A.

(iii)  Consolidated because control ultimately rests with us, through direct
       and indirect ownership.

(iv)   Company name changed to Fratelli Vita Industria e Comercio Ltda. and
       then merged into CRBS S.A.

(v)    A holding company formed in 1999.

(vi)   Holding company liquidated in 1999.




(e)    Investments in equity affiliates

Investments in affiliated companies in which we have the ability to exercise
significant influence over the operating and financial policies are accounted
for under the equity method. Accordingly, our share of net earnings (losses)
of these companies is included in consolidated results of operations. Direct
and indirect ownership percentages of the voting and nonvoting capital, of
significant affiliated companies at December 31 are presented below:


                                                                              %
                                                       ------------------------
Companies accounted for under the
    equity method                                       2000      1999     1998
                                                       -----     -----    -----
Companhia Antarctica Paulista - Industria
    Brasileira de Bebidas e Conexos (1)                          100.0
Cervejaria Astra S.A. ("Astra")                         43.2      43.1     43.1
Cervejaria Miranda Correa S.A. (2)
    ("Miranda Correa")                                  60.8      60.8     60.8
Miller Brewing do Brasil Ltda. (3)                      50.0      50.0     50.0
    ("Miller)
Pilcomayo Participacoes S.A. (3)                        50.0      50.0     50.0
    ("Pilcoma
Compania Salus S.A. (4)                                 15.1



                                     F-30



<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------

(1)  Until April 7, 2000, interim restrictions imposed by the CADE prevented
     AmBev from proceeding with the integration. For the same reasons, AmBev
     did not have a controlling financial interest in Antarctica until April
     7, 2000, for U.S. GAAP purposes. However, AmBev does believe that while
     these restrictions did preclude consolidation until April 7, 2000, we did
     exercise significant influence over Antarctica. Accordingly, in 1999 and
     through the first quarter of 2000 we treated our investment under the
     equity method rather than consolidating our interest in Antarctica. As
     from April 1, 2000 Antarctica is fully consolidated into AmBev.

(2)  Accounted for under the equity method as we have a 50% interest in the
     investee's voting share capital and do not exercise control.

(3)  We have suspended applying the equity method in relation to Miranda
     Correa, Miller and Pilcomayo, as our investment in each affiliate has
     been reduced to zero. Accordingly, because we have a commitment to cover
     our investees' losses, at December 31, 2000 a provision for additional
     losses in excess of the carrying amount of our original investments, of
     US$ 18,739, (1999 - US$ 23,627) has been included in "Other longterm
     liabilities."

(4)  We have a 26.2% interest in the voting capital of Special Purpose
     Vehicles Salus S.A. which in turn owns 57.3% of the voting capital of
     Compania Salus S.A.

Other investments in which we do not exercise significant influence or have
less than a 20% interest in the voting capital are accounted for at cost.
Long-term receivables from related parties at December 31, 2000 relate
primarily to advances made to Astra and Pilcomayo.

(f)  Pro forma results of operations

The following summarized combined unaudited pro-forma financial information
for the two-year period ended December 31, 2000 assumes the acquisition of
Antarctica had occurred on January 1, 1999, the investment was accounted for
on a consolidated basis and all Brahma shareholders had converted their shares
to AmBev shares (other acquisitions during 2000 and 1999 were not
significant):


                                     F-31


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
------------------------------------------------------------------------------



                                                          Year ended December 31
                                               ---------------------------------
                                                        2000                1999
                                               -------------      --------------

Net sales                                      US$ 2,827,932      US$ 2,526,312

Gross profit                                       1,255,510            990,640

Operating income                                     429,886             51,716

Net income (loss)                                US$ 622,842        US$ (30,551)

Basic Pro-forma earnings (losses) per share

    Preferred shares                               US$ 17.85          US$ (0.92)

    Common shares                                  US$ 16.23          US$ (0.92)


The unaudited proforma combined results of operations may not be indicative
of the actual results that would have been generated had the acquisition
occurred at January 1, 1999.

2    Summary of our significant accounting policies

(a)  Basis of presentation of our financial statements

     These consolidated financial statements include our financial statements
     and those of our majority-owned subsidiaries. The consolidated financial
     information has been prepared in accordance with United States Generally
     Accepted Accounting Principles ("US GAAP"), which differ from the
     Brazilian accounting principles applied by us in our statutory financial
     statements.

     Shareholders' equity and net income included in these financial
     statements differ from those included in the statutory accounting records
     as a result of:


                                     F-32


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
------------------------------------------------------------------------------



 .    differences between the rate of devaluation of the Brazilian real (R$)
     against the United States dollar;

 .    indices mandated for indexation of statutory financial statements in the
     past in Brazil;

 .    adjustments made to reflect the requirements of U.S. GAAP.

AmBev's consolidated financial information as of and for the year ended
December 31, 2000 reflects our 100% interest in Antarctica on an equity basis
through March 31, 2000 and our consolidated interest in Antarctica for the
ninemonth period ended December 31, 2000. AmBev's consolidated financial
information as of and for the year ended December 31, 2000 reflects the
reintegration of the Brahma shareholders who exchanged their shares for AmBev
shares on September 14, 2000.

AmBev's consolidated financial information as of and for the year ended
December 31, 1999 reflects our 100% interest in Antarctica on an equity basis
for the six-month period then ended and the related purchase accounting
adjustments associated with the purchase of Antarctica as of July 1, 1999. The
AmBev's consolidated financial information as of and for the year ended
December 31, 1999 reflects the reintegration of the Brahma shareholders who
exchanged their shares for AmBev shares on September 14, 2000 as though they
had converted on July 1, 1999.

AmBev's consolidated financial information for the year ended December 31,
1998 is that of Brahma, the predecessor of AmBev (Note 1(b)(i)).

In preparing these consolidated financial statements, our management is
required to make estimates and assumptions that affect the reported amounts of
assets, liabilities, sales and expenses for the reporting periods. Such
estimates include the selection of useful lives of property, plant and
equipment, and goodwill, provisions necessary for contingent liabilities,
income tax valuation allowances and other similar evaluations. Actual results
for future periods could differ from those estimates.

Comprehensive net income (loss) is presented in the statement of changes in
shareholders' equity and consists of net income (loss) for the year, the
cumulative translation adjustment and in 1998 the deferred tax liability
recorded for the change in functional currency.


                                     F-33


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------

(b)  Basis of translation

     In these financial statements, we have used the U.S. dollar as our
     reporting currency. The U.S. dollar amounts for the periods presented
     have been remeasured (translated) from the Brazilian currency amounts in
     accordance with the criteria set forth in Statement of Financial
     Statements ("SFAS") No. 52., "Foreign Currency Translation".

     The local currency in a highly inflationary economy is not considered
     stable enough to serve as a functional currency, and a more stable
     currency is used instead. Accordingly, through 1997 we used the U.S.
     dollar as the functional currency. As from January 1, 1998, our
     management concluded that the Brazilian economy ceased to be considered
     highly inflationary and we changed our functional currency to the local
     currency (the Brazilian real). Accordingly, at January 1, 1998, we
     translated the U.S. dollar amounts of nonmonetary assets and liabilities
     into real at the current exchange rate and those amounts became the new
     accounting bases for such assets and liabilities.

     For the years ended December 31, 2000 and 1999, we have translated all
     assets and liabilities into U.S. dollars at the current exchange rate
     (December 31, 2000 - R$ 1.9554: US$ 1.00; December 31, 1999 - R$ 1.7890:
     US$ 1.00) and all accounts in the statements of operations and cash flows
     at the average rates of exchange in effect during the period (2000-R$
     1.8303: US$ 1.00; 1999 - R$ 1.8148: US$ 1.00; 1998 - R$ 1.1605: US$ 1.00).
     The translated amounts include local currency indexation and exchange
     variances on assets and liabilities denominated in foreign currencies.
     The related translation adjustments are made directly to the cumulative
     translation adjustment ("CTA") account in shareholders' equity.

     In January 1999, the Brazilian Central Bank allowed the real to U.S.
     dollar exchange rate to fluctuate freely. The significant devaluation of
     the real in 1999 resulted in a net translation loss, arising from the
     translation of the balance sheet accounts (monetary and nonmonetary
     assets and liabilities) from Brazilian real to U.S. dollars. The
     translation loss has been allocated directly to the CTA account in
     shareholders' equity. Foreign exchange transaction gains or losses are
     reflected directly in income for each period.


                                     F-34


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------

(c)  Derivative financial instruments

     We use derivative financial instruments for purposes other than trading
     and do so to manage and reduce our exposures to market risk resulting
     from fluctuations in interest rates and foreign currency exchange rates.
     These instruments do not qualify for deferral, hedge, accrual or
     settlement accounting and are marked-to-market value, with the resulting
     gains and losses reflected in the statement of operations within
     "Financial income or financial expense" respectively.

     Derivative financial instruments are used to hedge risk caused by
     fluctuating currency and interest rates. We enter into forward-exchange
     contracts and currency swaps to hedge foreign currency exposure.
     Decisions regarding hedging are made on a case-by-case basis, taking into
     consideration the amount and duration of the exposure, market volatility,
     and economic trends. We use the fair-value method of accounting, recording
     realized and unrealized gains and losses on these contracts which are
     included in financial income (expense), net. We do not hold or issue
     financial instruments for trading purposes.

     We use interest rate swap agreements to manage interest costs and risks
     associated with changing rates. The differential to be paid or received
     is accrued as interest rates change and is recognized in interest expense
     over the life of the agreements.

     We have a policy of only entering into contracts with parties that have
     high credit ratings. The counterparties to these contracts are major
     financial institutions and AmBev does not have significant exposure to
     any single counterparty. Credit loss from counterparty nonperformance is
     not anticipated (Note 15).

     SFAS No. 133 "Accounting for Derivative Instruments and Hedging
     Activities" requires all derivatives be recorded as either assets or
     liabilities and measured at fair value. In our case this statement is
     effective as from January 1, 2001. We do not expect the adoption of SFAS
     No. 133 to have a significant impact on our financial statements.


                                     F-35


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------


(d)  Reclassifications

     Certain amounts in 1998 and 1999 have been reclassified to conform to the
     2000 presentation. The original 1999 presentation has been modified to
     present shareholders' equity and net income as though all Brahma
     shareholders had converted to AmBev shares in 1999 (Note 1(b)(v)).
     Certain presentations of treasury shares at fair value have been reversed
     against additional paidin capital without affecting total shareholders'
     equity. Furthermore, we have reclassified shipping and handling costs
     from selling and marketing expenses to cost of sales to conform with the
     conclusion of the Emerging Issues Task Force - EITF No. 00-10 "Accounting
     for Shipping and Handling Fees and Costs".

     Furthermore, certain net foreign exchange losses on loans which did not
     affect cash in 1999 and 1998 have been reclassified from financing to
     operating activities.

(e)  Cash and cash equivalents

     Cash and cash equivalents are carried at cost plus accrued interest. Cash
     equivalents, primarily consisting of time deposits denominated in
     Brazilian reais have a ready market and an original maturity of 90 days
     or less. We also invest in time deposits denominated in U.S. dollars
     through our subsidiaries located outside Brazil.

(f)  Trading securities

     We buy and sell debt and equity securities with the objective of selling
     in the short term. In accordance with SFAS No. 115, "Accounting for
     Certain Investments in Debt and Equity Securities", these securities are
     measured at fair value at the balance sheet dates and unrecorded
     gains/losses are included in financial income/expense. The securities
     comprise fixed-term investments and Brazilian Government.


                                     F-36


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------


(g)  Accounts receivable

     Accounts receivable are stated at estimated realizable values. Allowances
     are provided, when necessary, in an amount considered by our management
     to be sufficient to meet probable future losses related to uncollectible
     accounts.

(h)  Inventories

     Inventories are stated at the lower of average cost of purchase or
     production, or realizable values.

(i)  Investment in affiliates

     Investments in affiliated companies in which we have the ability to
     exercise significant influence over the operating and financial policies
     are accounted for under the equity method. Other investments in which we
     do not exercise significant influence or have less than a 20% interest in
     the voting capital are accounted for at cost.

(j)  Property, plant and equipment

     Property, plant and equipment are recorded at cost and include interest
     capitalized during construction of major facilities. Interest on
     construction period borrowings denominated in real is capitalized.
     Interest on construction period borrowings denominated in foreign
     currencies is capitalized using contractual interest rates, exclusive of
     foreign exchange gains or losses. Expenditures for maintenance and
     repairs are charged to expense when incurred. Certain costs incurred in
     connection with developing or obtaining internal-use software are
     capitalized and certain other costs are expensed.

     Bottles classified as fixed assets are used during normal bottling
     operations. These are returnable bottles and, accordingly, are
     depreciated and written-off when breakage occurs. We maintain a small
     amount of bottles for sale to distributors to replace bottles broken in
     the distribution network. These bottles are recorded in inventory and are
     not used during our day-to-day operations. They are not subject to
     depreciation and are written-off when breakage occur.


                                                   F-37


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------


     Depreciation is computed on a straight-line basis over the useful lives of
     the assets as follows:


                                                                          Years
                                                                     ----------
     Buildings                                                               25
     Machinery and equipment, including equipment used by third
     parties                                                            5 to 10
     Bottles and crates                                                       5
     Vehicles                                                                 5

(k)  Assets held for sale

     Assets held for sale include land and buildings and are reported at the
     lower of their carrying amounts or their fair values less cost to sell.
     Depreciation relating to such assets ceases upon transfer to the "Assets
     held for sale" account.

(l)  Acquisitions and intangible assets

     Businesses acquired from third parties are accounted for under the
     purchase method of accounting. Accordingly, the purchase price, plus
     direct costs of acquisition, is allocated to assets acquired and
     liabilities assumed based upon their estimated fair values at the date of
     acquisition. The excess of the purchase consideration over the estimated
     fair value of net assets acquired is recorded as goodwill. Results of
     operations are included as from the acquisition date.

     Goodwill and other intangible assets are stated at cost and are amortized
     on a straightline basis over the estimated future periods to be
     benefited. Recoverability of goodwill is assessed on a regular basis
     using undiscounted future cash flows and any impairment, measured based
     on market values, would be recognized in operating results if a permanent
     decrease in value were to occur.


                                     F-38


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------


(m)  The Brahma Welfare and Zerrenner Foundations
     and post-retirement benefits

(i)  Consolidation of the Foundations

     Reflecting the ability we had to appoint all three directors of the
     Brahma Welfare Foundation and that entity's ownership of Brahma shares,
     later exchanged for AmBev shares, held in its investment portfolio, we
     consolidated the Brahma Welfare Foundation in our financial statements.

     On October 27, 2000, our employee benefit programs were restructured and
     the Zerrenner Foundation was legally merged with the Brahma Welfare
     Foundation and the Brahma Welfare Foundation ceased to exist. The
     Zerrenner Foundation is one of the three controlling shareholders of
     AmBev under a shareholders agreement. The Zerrenner Foundation, is
     contractually required to provide medical, dental, educational and social
     assistance to current and retired employees of AmBev and their
     beneficiaries and covered dependents. Although its bylaws state that the
     Zerrenner Foundation can also provide benefits to persons and projects
     unrelated to AmBev, in practice few such donations have been made. The
     assets of the Zerrenner Foundation are effectively only used to discharge
     benefits for active and retired employees of AmBev. Furthermore AmBev may
     contribute each year up to 10% of our Brazilian Corporation Law
     consolidated net income to support the Zerrenner Foundation.

     The Zerrenner Foundation is managed by a Council, an Advisory Council and
     a Permanent Benefits Commission. The Council consists of a minimum of
     seven counselors and a maximum of nine counselors. As a result of the
     merger of the Brahma Welfare Foundation into the Zerrenner Foundation,
     AmBev has the right to appoint two counselors; the remaining counselors
     are self-appointed by the existing counselors of the Zerrenner Foundation.
     The significant influence AmBev exerts over the investing decisions of
     the Zerrenner Foundation, its right to nominate certain counselors, the
     disbursements made by the Zerrenner Foundation, in most cases, for the
     exclusive benefit of our employees, require us to consolidate the net
     assets of the Zerrenner Foundation in our balance sheet (Note 17(e)). A
     substantial part of these assets are represented by shares in AmBev and
     have been reflected as treasury shares thereby reducing the number of
     outstanding shares. The net assets held by Brahma Welfare and Zerrenner
     Foundations are restricted and can only be used for the purposes stated
     in their by-laws (Note 17 (d) and (e)).


                                     F-39


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------


     Prior to the Antarctica Combination, the Zerrenner Foundation owned 88.1%
     of the voting shares of Antarctica and 87.9% of the total shares of
     Antarctica. After the combination was concluded, the Zerrenner Foundation
     owned 14.4% of the voting shares and 6.6% of the total shares of AmBev.
     Following the merger of the Brahma Welfare Foundation into the Zerrenner
     Foundation, the latter's ownership in AmBev increased to 22.7% of the
     voting shares and 10.6% of the total shares of AmBev.

(ii) Provision of postretirement benefits

     Through October 27, 2000 the Brahma Welfare Foundation and the Zerrenner
     Foundations provided post-retirement benefits to certain employees. As
     from this date the Zerrenner Foundation assumes full responsibility for
     providing such benefits although we continue as sponsors (Notes 17(d) and
     (e)). We adopt SFAS No. 106, "Employers' Accounting for Postretirement
     Benefits Other than Pensions", which requires a provision for the costs
     of postretirement benefits expected to be paid to current, former or
     inactive employees upon retirement. Expenses relating to benefits we
     provide to our current employees are expensed as incurred whereas those
     relating to retired employees (current as well as expected in the future)
     and their dependents are accounted for in accordance with SFAS No. 106.
     Certain actuarial gains and losses are recognized on an accrual basis as
     permitted under SFAS No. 106.

(iii) Recognition of cost incurred on behalf of shareholder

     Pursuant to SEC Staff Accounting Bulletin ("SAB") Topic 5-T, AmBev has
     recognized as expense costs incurred by the Zerrenner Foundation on our
     behalf in respect of the provision of educational and social assistance
     to current employees of Antarctica and current employees of the Zerrenner
     Foundation involved directly in the provision of assistance to Antarctica
     employees. An offsetting credit to shareholders' equity, representing a
     contribution to capital by the Zerrenner Foundation, has been recognized
     for an amount equal to this expense. Amounts paid as employee benefits by
     the Zerrenner Foundation to former employees and their beneficiaries and
     covered dependents are recognized as a reduction of the corresponding
     actuarial liability. A credit shareholders' equity, representing a
     contribution to capital by the Zerrenner Foundation, has also been
     recognized for an amount equal to the post retirement benefits paid by
     the Zerrenner Foundation to such employees.


                                     F-40


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------

(n)  Recoverability of our long-lived assets

     In accordance with SFAS No. 121, "Accounting for the Impairment of
     Long-Lived Assets and for Long-Lived Assets to be Disposed of", our
     management reviews long-lived assets whenever events or changes in
     circumstances indicate that the carrying value of an asset or group of
     assets may not be recoverable. For the purpose of determining and
     measuring impairment, our management primarily reviews property, plant
     and equipment held and used in the business, investments accounted for
     under the equity method, goodwill and certain deposits and tax incentive
     investments.

     Assets are grouped and evaluated for possible impairment at a plant
     level; impairment is assessed based on undiscounted cash flows from
     forecasted operating results of the business over the estimated remaining
     lives of the assets (Note 10 and 11).

(o)  Compensated absences

     The liability for future compensation for employee vacations is fully
     accrued as earned.

(p)  Taxes

     Brazilian income taxes consist of federal income and social contribution
     taxes, the latter being a federally mandated tax based on income, as
     recorded in our statutory accounts and the respective statutory
     accounting records of our subsidiaries. There are no taxes levied by
     state or local authorities on income in Brazil.

     For the purposes of these financial statements, we have applied SFAS No.
     109 "Accounting for Income Taxes", for all periods presented. The effect
     of adjustments made to reflect the requirements of U.S. GAAP as well as
     the differences between the tax basis of nonmonetary assets and the
     statutory accounting basis prepared in accordance with Brazilian
     Corporation Law have been recognized as temporary differences for the
     purpose of recording deferred income taxes. Prior to 1998, in accordance
     with paragraph 9(f) of SFAS No. 109, deferred taxes were not recorded
     with respect to differences relating to assets and liabilities translated
     at historical rates that resulted from changes in exchange rates or
     indexing for Brazilian tax purposes. Such accumulated differences were
     recognized in shareholders' equity when we changed our functional
     currency to the real on January 1, 1998 (Note 2(b)).


                                     F-41



<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------


     All net operating loss carryforwards are recorded as deferred tax assets
     except those described in Note 6(c). Valuation allowances are established
     when our management is not confident that utilization of such tax assets
     is more likely than not going to occur sometime in the future.

     All current and noncurrent deferred tax liabilities and assets are offset
     unless they relate to different tax paying entities or to entities
     operating in different tax jurisdictions.
     Certain states in Brazil provide incentives applied to indirect taxes in
     the form of deferrable tax payments and partial or complete tax
     abatements for periods ranging from one to twenty years to promote
     investments in their regions. AmBev and its subsidiaries have entered in
     these fiscal incentive programs under which payment of taxes may be
     deferred with partial or total discounts on these taxes. We recognize the
     benefits on the discounted tax payments in the statement of operations
     when the gain is assured and all conditions have been met.

(q)  Pension plans

     We operate a funded pension fund, the Instituto AmBev de Previdencia
     Privada-IAPP ("AmBev Pension Plan"), which is the successor to the
     Instituto Brahma de Seguridade Social-IBSS ("Brahma Pension Plan") from
     December 8, 2000. The AmBev Pension Plan operates a defined benefit and a
     defined contribution plan for the former employees of Brahma and new
     employees of AmBev. AmBev also operates a defined benefit plan and
     defined contribution plan for former Antarctica employees ("Antarctica
     Special Plan" and "Antarctica Normal Plan", respectively). The defined
     benefit plans are accounted for in accordance with SFAS No. 87,
     "Employers' Accounting for Pensions" under the projected unit method. The
     accompanying notes to the financial statements have been presented in
     accordance with SFAS No. 132, "Employer's Disclosures about Pensions and
     other Post-retirement Benefits" (Notes 17 (a) and (c)). Certain actuarial
     gains and losses are recognized currently.


                                     F-42


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------


(r)  Stock ownership plan

     We have chosen to account for our stock ownership plan using the
     intrinsic value method described in APB No. 25 "Accounting for Stock
     Issued to Employees" and related interpretations. Accordingly,
     compensation cost for stock ownership is measured as the excess of the
     quoted market price of our stock at the date of the grant over the amount
     an employee or director must pay to acquire the stock. The value of the
     option is determined when the option is granted but is charged ratably to
     compensation cost and shareholders' equity over a period of five years
     from the date the option is granted, the period over which the related
     employee or director services are rendered.

     SFAS No. 123, "Accounting for StockBased Compensation" encourages, but
     does not require, us to record compensation cost for stockbased employee
     compensation plans at fair value. Pro forma net income and earnings per
     share, calculated using the fair value based method, as required by SFAS
     No. 123, are disclosed in Note 16(i). This information may not be
     representative of the effects on net income for future periods, as the
     options vest over five years and additional awards may be made each year.

     We provide advances to certain employees, who may also be directors, to
     finance the purchases of these shares. Financing arrangements are
     normally for periods not exceeding four years and accrue interest of 8%
     per year over a designated general local price index. As the advances are
     collaterized by the stock issued upon exercise of the stock option, the
     receivable from advances is recorded as a reduction of shareholders'
     equity.

(s)  Treasury shares

     Treasury shares, including the shares held by the Brahma Welfare
     Foundation (Note 2(m)) through October 27, 2000 and by Zerrenner
     Foundation thereafter, are recorded at cost. Treasury shares owned by the
     Zerrenner Foundation are recorded at cost at the date it was first
     consolidated, which is the quoted market price of those shares at October
     27, 2000. Treasury shares cancelled are recorded as a reduction of share
     capital and additional paid-in capital. Amounts allocated to share capital
     are determined based upon the proportion of the number of shares
     cancelled to the number of shares outstanding at the date of
     cancellation. This proportion is applied to share capital at the date of
     cancellation. The difference between reacquisition cost of treasury
     shares and the reduction of share capital is recorded as a component of
     additional paidin capital.


                                     F-43


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------


(t)  Subscription warrants

     The fair value of subscription warrants is recorded as additional paid-in
     capital when these amounts are received. When subscription warrants are
     exercised, the amount originally recorded as additional paid-in capital is
     transferred to share capital.

(u)  Interest attributed to shareholders' equity

     Brazilian corporations are permitted to deduct, for tax purposes,
     interest attributed to shareholders' equity, which is paid in the form of
     a dividend. For financial reporting purposes, interest attributed to
     shareholders' equity is recorded as a deduction from unappropriated
     retained earnings. We pay the related withholding tax on behalf of our
     shareholders (Note 16(g)).

(v)  Revenues and expenses

     Sales revenues and related cost of sales are recognized in income when
     products are delivered to customers. No reserve for expected return is
     recorded as such amounts are insignificant. Other expenses and costs are
     recognized on the accrual basis.

(w)  Shipping and handling costs

     Shipping costs consist of internal and thirdparty costs. Handling costs
     are incurred to store, move and prepare the products for shipment. The
     shipping and handling costs are expenses as incurred and recorded in cost
     of sales. No amounts are separately paid to us by our customers for
     shipping and handling, but a charge for these costs is inherently
     included in the selling price.


                                     F-44


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------


(x)  Marketing costs

     Marketing costs are reported in selling and marketing expenses and
     include costs of advertising and other marketing activities. Marketing
     costs are not deferred at year-end and are charged to expense ratably in
     relation to sales over the year in which incurred. Advertising expenses
     were US$ 150,782, US$ 121,436, and US$ 244,319, for the years ended
     December 31, 2000, 1999, and 1998, respectively. Deferred advertising
     consists of media and advertising-related prepayments and promotional and
     production costs of future media advertising. These assets are expensed
     in the first period campaigns are aired. There were no deferred
     advertising assets recorded at the balance sheet dates presented.
     Additionally, we expensed certain promotional materials and other related
     costs totaling US$ 17,490 and US$ 7,959 in the years ended December 31,
     2000, and 1999.

(y)  Environmental expenditures

     Expenditures relating to ongoing environmental programs are charged
     against earnings as incurred. Ongoing programs are designed to minimize
     the environmental impact of our operations and to manage any potential
     environmental risks of our activities. Provisions with respect to such
     costs will be recorded at the time they are considered to be probable and
     reasonably estimable.

(z)  Earnings per share

     Pursuant to SFAS No. 128, "Earnings Per Share", we have presented our
     earnings per thousand share for each class of shares and preferred shares
     have been treated as participating securities. Earnings per share are
     determined based on outstanding shares which exclude shares held in
     treasury or shares held by the Brahma Welfare Foundation and Zerrenner
     Foundation (Note 2 (m)). Beginning in 1997, pursuant to Law 9457/97,
     preferred shares, not accruing minimum or fixed dividends, are entitled
     to a dividend of 10% in excess of that paid to common shares. Net income
     has been allocated to the common and preferred classes of shares and
     earnings per thousand share amounts have been determined as though all
     earnings will be distributed. Common and preferred shareholders share
     equally in undistributed losses. Earnings may be capitalized, used to
     absorb losses or otherwise appropriated; consequently, such earnings
     would no longer be available to be paid as dividends. Therefore, no
     assurance can be made that preferred shareholders will receive the 10%
     premium on undistributed earnings.


                                     F-45


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------


     For 2000 and 1999, AmBev's basic earnings (loss) per thousand share are
     computed by dividing the consolidated net income (loss) by the weighted
     average shares outstanding as if all Brahma shareholders had converted to
     AmBev shares on July 1, 1999.

     For 1998, AmBev's (formerly Brahma's) basic earnings per thousand share
     is computed by dividing consolidated net income by the weighted-average
     number of common and preferred shares.

     Stock options and warrants are considered as common stock equivalents in
     calculating diluted earnings per thousand share.

     In 1996, Brahma issued debt to the International Finance Corporation
     ("IFC") part of which may be converted at the option of the IFC to
     preferred shares (Note 13(c)). As the effects of applying the
     "if-converted method" are antidilutive when the interest expense (net of
     tax and nondiscretionary adjustments) per common share equivalent is
     considered in determining earnings per share, diluted earnings per share
     are not affected by the convertible securities.

     Potentially antidilutive shares at December 31, 2000, which have been
     excluded from the earnings per share calculation, totaled 53,727 thousand
     preferred shares (1999 and 1998 53,727 thousand preferred shares).

     AmBev has issued employee stock options and share warrants, the dilutive
     effect of which are reflected in diluted earnings per share by
     application of the "treasury stock method". Under the treasury stock
     method, earnings per share are calculated as if options were exercised
     and as if the funds received were used to purchase our own stock.


                                     F-46


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------


3    Other operating (expense) income, net

     The significant components of "Other operating (expense) income, net" in
     the years ended December 31, 2000, 1999 and 1998 are as follows:

     .    2000 - Expense of US$ 29,001 relating to provision for civil claims
          which are provisioned under "Accrued liabilities for legal
          proceedings"; expense of US$ 20,913 relating to impairment loss
          recognized during the year on our plant, property and equipment
          (Note 11); expense of US$ 9,086 relating to a provision for the
          interest portion of valueadded tax (ICMS) and excise tax (IPI)
          contingent tax credits (Note 18 (i)); expense for valuation
          allowance of US$ 8,712 on prepaid water cost (Note 9);and various
          expenses of lesser amounts arising in the ordinary course of
          business; partially offset by income of US$ 5,457 relating the gain
          of the sale of Bavaria S.A.

     .    1999 - Expenses of US$ 19,183 relating to a provision for the interest
          portion of ICMS and IPI contingent tax credits (Note 18(a)(i)); US$
          17,333 of impairment loss recognized during the year on our plant,
          property and equipment (Note 11); US$ 5,680 involving an assessment
          against a subsidiary of AmBev for not filing ICMS documentation in
          magnetic format; US$ 6,947 relating to over 100 different cases with
          individual Brazilian states relating principally to the payment of
          ICMS substitute and ICMS and US$ 21,207 of provisions made for
          distributor, supplier, consumer and various other claims; partially
          offset by income from the reversal of an ICMS provision of US$ 8,386
          relating to a judgement in our favor and a gain of US$ 5,323 on sale
          of our property, plant and equipment.

     .    1998 - Gain on the sale of property, plant and equipment of US$
          10,036, which was partially offset by various expenses of lesser
          amounts arising in the ordinary course of business.


                                     F-47



<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------


4    Financial income and expense

<TABLE>
<CAPTION>
                                                                                           Year ended December 31
                                                                   ----------------------------------------------
                                                                          2000             1999              1998
                                                                   -----------      -----------       -----------
<S>                                                                <C>              <C>              <C>

Financial income
    Interest income on cash equivalents                             US$ 76,690       US$ 93,028       US$ 118,535
    Trading securities - realized and unrealized gains                   9,827              347            26,001
    Gains on foreign currency and interest rate
       swap activities                                                  18,963          180,438             4,478
    Interest on income tax and social
       contribution claims and advances                                 10,762           27,219             7,745
    Foreign exchange gains                                              27,299           35,515            19,093
    Other                                                               20,774           28,282            22,784
                                                                   -----------      -----------       -----------

                                                                   US$ 164,315      US$ 364,829       US$ 198,636
                                                                   ===========      ===========       ===========
Financial expense
    Charges on Brazilian real debt                                 US$ (87,196)     US$ (76,396)      US$ (82,691)
    Charges on U.S. dollar debt                                        (58,035)         (61,429)          (64,979)
    Foreign exchange losses principally on loans                       (64,502)        (189,531)          (52,673)
    Interest on liabilities other than loans
       (principally contingencies)                                     (27,260)         (25,053)          (26,619)
    Trading securities - realized and unrealized
       losses                                                             (481)          (1,653)
    Losses on foreign currency and interest rate
       swap activities                                                 (26,622)         (61,729)          (26,745)
    Tax on financial transactions                                      (33,780)         (13,007)          (17,304)
    Banking charges and other                                          (12,336)         (13,447)          (18,493)
                                                                   -----------      -----------       -----------

                                                                   US$ (310,212)    US$ (442,245)     US$ (289,504)
                                                                   ============ ================      ============
</TABLE>

                                     F-48


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------


5    Other nonoperating (expense) income, net

     The significant components of "Other non-operating (expense) income, net"
     in the years ended December 31, 2000, 1999 and 1998 are as follows:

     .    2000 - Fiscal incentives charges of US$ 1,663 and impairment charges
          on nonoperational fixed assets of US$ 1,502, which were partially
          offset by income recorded upon release of provisions for additional
          losses in excess of the carrying value of our investments in Miranda
          Correa, Miller and Pilcomayo of US$ 4,888.

     .    1999 - Expense for additional losses in excess of the carrying amount
          of our investments in Miranda Correa, Miller and Pilcomayo of US$
          8,541.

     .    1998 Gain on the sale of nonoperational assets of US$ 9,222 and
          income recorded upon release of provisions for additional losses in
          excess of the carrying amount of our investments in Miranda Correa,
          Miller and Pilcomayo of US$ 4,578.


6    Income taxes

(a)  Tax rates

     Income taxes in Brazil include federal income tax (25%) and social
     contribution (8%). The composite income tax and social contribution tax
     rate used for establishing the net deferred tax asset for 2000, 1999 and
     1998 is 33%.


                                     F-49



<PAGE>



Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------

(b)  Income tax reconciliation


<TABLE>
<CAPTION>

                                                                                 Year ended December 31
                                                              -----------------------------------------
                                                                    2000           1999            1998
                                                              ----------      ---------      ----------
<S>                                                         <C>             <C>            <C>

Income (loss) before income taxes, equity in
  affiliates and minority interest                           US$ 288,005     US$ 98,275     US$ 133,515
                                                             ===========     ==========     ===========

Tax benefit (expense) at statutory rates - 33%               US$ (95,042)    US$(32,431)    US$ (44,060)

Adjustments to derive effective rate:

  Release of valuation allowances (1)
    Tax restructuring - Antarctica and its subsidiaries          233,188
    Tax restructuring - Brahma and its subsidiaries               43,195
  Reversal of income tax on offshore earnings (2)                146,215                         18,598
  Tax asset on post-retirement benefits liability                 41,140
  Benefit from deductibility of interest attributed
    to shareholders' equity                                       33,441         32,399          53,643
  Nontaxable gains from fiscal incentives
    in subsidiaries (3)                                           28,450          9,636             532
  Re-filing of prior years tax returns (4)                                       27,044
  Difference in foreign income tax rates (5)                                     25,251          11,182
  Current net operating losses for which no deferred
    tax asset have been constituted.                                            (29,476)        (29,200)
  Reversal of tax contingency provisions                          (5,353)        19,228          67,962
  Deferred tax on adjustments made to tax book
    above basis of equity in affiliates                           (2,254)        (1,909)           (432)
  Other permanent differences                                    (35,740)        (8,354)         14,471
                                                            ------------     ----------      ----------

Tax benefit per statement of operations                      US$ 387,240     US$ 41,388      US$ 92,696
                                                            ============     ==========      ==========

</TABLE>

(1)  In October 2000, we implemented a major restructuring of our operating
     companies in Brazil in order to optimize the net operating losses available
     for offset. As a consequence of this legal restructuring, Brahma purchased
     the operating units from its subsidiaries CRBS, Skol and Pepsi which became
     branches of Brahma as from November 2000. This permitted the release of the
     valuation allowance against the deferred tax asset of US$ 32,918, because
     we now consider it more likely than not that these tax loss carryforwards
     will be used. The restructuring, which will continue in 2001 will also
     permit tax loss carryforwards from Antarctica and its subsidiaries of US$
     209,138 to be released from restrictions. This legal restructuring took
     place after the combination of Brahma and Antarctica and is a
     post-acquisition event.


                                     F-50



<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------

(2)  Pursuant to the restructuring described in footnote (1) above, during 2000,
     Brahma sold 30%, and its subsidiaries Skol and CRBS, sold 10% and 11%
     respectively, totaling 51%, of their interests in Jalua S.A., a company
     registered in Montevideo, Uruguay, to another Brahma subsidiary, Eagle
     S.A.. As the foreign earnings for 1998, 1999 and first quarter of 2000,
     will no longer be subject to tax the provision which had been made by
     Brahma and its subsidiaries for tax on future repatriation of foreign
     earnings was reversed in "Deferred income tax benefit". Eagle's liability
     for taxes on these earnings is only prospective as from the date of
     transfer of ownership and not retroactive to the date of its affiliates
     original interests. The deferred tax liability on earnings from affiliates
     located outside Brazil, provided through to December 31, 1997, was
     partially reversed to income in 1998 following the enactment of a law which
     confirmed that such earnings will be taxed upon repatriation on a
     prospective basis. We are confident that prudent, feasible and
     costeffective tax planning strategies will ensure that no tax will be
     payable upon repatriation or distribution from off-shore earnings.

(3)  AmBev has entered into various programs for fiscal incentives for ICMS,
     which have resulted in non-taxable gains. These fiscal incentives are
     mainly concentrated in the states of Rio de Janeiro, Rio Grande do Sul and
     in the Northeastern states of Brazil.

(4)  We refiled our 1993 tax return upon receiving a new interpretation of tax
     legislation in connection with a review performed in 1999 by external tax
     consultants who identified a tax loss in 1993, which we had not fully
     utilized. Prior to this review, we believed that we did not have rights to
     this tax benefit. The issue arose because in 1992 we made advances to a
     wholly-owned offshore subsidiary in anticipation of future capital
     increases. As this was considered to be a permanent investment (under
     accounting principles prescribed by Brazilian Corporation Law), the
     Brazilian tax authorities prohibited us from treating as taxdeductible, the
     interest expense on the loan we had advanced to the subsidiary. Following
     the in-depth analysis conducted by the external tax consultants in 1999 and
     their new interpretation of the tax situation in 1993, we refiled the 1993
     tax return, creating an asset related to a tax loss for that year.

(5)  After the tax restructuring which took place in October 2000, we no longer
     provide deferred tax on the earnings generated by offshore companies.
     Management believes, based on external legal counsel, that these earnings
     are only taxable when remitted to Brazil and it is not foreseen that these
     earnings will be distributed. We are confident that prudent, feasible and
     cost-effective tax planning strategies will ensure that no tax will be
     payable upon repatriation or distribution from off-shore earnings.


                                     F-51


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------

The major components of the deferred tax asset and liability accounts are as
follows:


                                                        Year ended December 31
                                                       -----------------------
                                                              2000        1999
                                                       -----------  ----------

Deferred income tax assets
  Brazilian net operating loss carryforwards           US$ 300,439  US$ 96,993
  Accrued liability for legal proceedings                  132,053      43,841
  Provisions for pension plan and post-retirement plan      25,933       2,163
  Foreign net operating loss carryforwards                  25,791      42,354
  Deferred charges written-off                              25,679       7,487
  Provision for losses on equity investments                12,101       7,797
  Allowance for doubtful accounts                           10,926       3,843
  Provision for employee profit sharing                      8,129       7,181
  Fair value adjustments on acquisitions                     5,993       8,611
  Other                                                     56,684      14,800
                                                       -----------  ----------

    Total deferred income tax assets                       603,728     235,070
                                                       -----------  ----------

    Valuation allowances

      Brazilian net operating loss carryforward                        (30,984)
      Foreign net operating loss carryforwards             (22,446)    (42,354)
                                                       -----------  ----------
                                                           (22,446)    (73,338)
                                                       -----------  ----------

Deferred income tax assets, net of valuation
 allowances                                                581,282     161,732
                                                        ----------   ---------

Deferred income tax liabilities
  Accelerated depreciation                                 (14,243)    (13,203)
  Employee benefits (Note 17)                              (10,416)     (5,962)
  Equity in offshore companies                              (1,061)    (57,847)
  Capitalized interest                                        (824)     (1,061)
  Other                                                    (13,580)    (13,689)

Total deferred income tax liabilities                      (40,124)    (91,762)

Net deferred tax assets                                US$ 541,158  US$ 69,970
                                                       ===========  ==========


                                     F-52


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------

(c)  Net operating loss carryforwards

(i)  Brazil

     Net deferred income tax assets include Brazilian net operating losses,
     which have no expiration dates, available for offset against future taxable
     income. Brazilian carryforward losses are available to offset up to 30% of
     annual income before tax in any year, determined in accordance with the
     Brazilian Corporation Law. Tax losses are not inflation-indexed. The
     movement of the deferred tax asset arising from Brazilian net operating
     loss carryforwards is as follows:


                                                          2000            1999
                                                    ----------      ----------

At beginning of year                                US$ 96,993      US$ 55,849

  Consolidation of Antarctica as of April 1, 2000      110,313
  Current net operating losses                         130,649         109,728
  Net operating losses utilized to settle taxes        (17,522)        (22,018)
  Foreign exchange losses                              (19,994)        (46,566)
                                                   -----------      ----------
At end of year                                     US$ 300,439      US$ 96,993
                                                   ===========      ==========

(ii) Countries outside Brazil

     The deferred income tax asset relating to foreign net operating losses has
     been fully provided for, except for the income tax asset on the net
     operating losses of our subsidiary Malteria Pampa of US$ 3,345.

     The foreign tax losses available for offset at December 31, 2000 expire as
     follows:

                                           Tax loss
Country    Expiry date                carryforwards                 Tax asset
-------    -----------                -------------                 ---------

Argentina  December 2001              US$ 13,209                    US$ 3,302
           by December 2004               35,497                        8,874

Venezuela  December 2001                  16,940                        4,235
           by December 2004               10,755                        2,689

Uruguay    by December 2003               13,381                        6,691
                                      ----------                    ---------
                                      US$ 89,782                   US$ 25,791
                                      ==========                   ==========


                                     F-53


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------

     The movement of the deferred tax asset of the net operating loss
     carryforwards of the foreign companies is as follows:

                                                        2000              1999
                                                  ----------        ----------

At beginning of year                              US$ 42,354        US$ 35,531
  Current net operating losses                         3,627             9,014
  Net operating losses utilized to settle taxes      (18,179)
  Foreign exchange losses                             (2,011)           (2,191)
                                                  ----------        ----------
At end of year                                    US$ 25,791        US$ 42,354
                                                  ==========        ==========

(iii) Valuation allowances

     Movement in the valuation allowances against the deferred tax assets
     relating to net operating loss carryforwards and other tax timing
     differences is as follows:

                                              2000           1999         1998
                                        ----------     ----------   ----------

At beginning of year                    US$ 73,338     US$ 71,731   US$ 59,530
  Current net operating losses               2,122         29,476       29,200
  Consolidation of Antarctica              238,566
  Releases to income
    Tax restructuring at Antarctica       (238,566)
    Tax restructuring at Brahma            (43,195)       (15,415)     (13,984)
  Foreign exchange gains                    (2,637)       (12,454)      (3,015)
  Other                                     (7,182)
                                        ----------     ----------   ----------

At end of year                          US$ 22,446     US$ 73,338   US$ 71,731
                                        ==========     ==========   ==========


                                     F-54


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------

     At the date of purchase, Pepsi and its affiliate, had net operating tax
     losses available for offset. Pursuant to the purchase agreement, in the
     event we use such tax loss carryforwards within a five-year period from the
     date of purchase in October 1997, we will be required to reimburse 80% of
     these amounts to the vendor. Amounts payable will be reduced by amounts
     owed to us under the indemnification provisions. Tax losses of Pepsi and
     affiliate at acquisition approximated US$ 259,000. As 20% of this total, at
     current exchange rates, US$ 29,574, is not subject to the provisions of the
     purchase agreement, we recorded this amount as an asset at December 31,
     1997. Until September 2000, however, this deferred tax asset, in addition
     to further losses incurred in the Pepsi business, was fully provided for as
     we were not confident that realization of this asset was more likely than
     not to occur sometime in the future. During 2000, we have released the
     valuation allowance of these losses due to a major restructuring in order
     to utilize these credits (Note 6 (b)). The deferred tax assets as of
     December 31, 2000 amounts to US$ 23,299.

7    Trade accounts receivable

     Trade accounts receivable relate primarily to sales to domestic customers.
     Allowances are provided, when necessary, in an amount considered by our
     management to be sufficient to meet probable future losses related to
     uncollectible accounts. Credit risk is minimized by the large customer base
     and control procedures by which we monitor the creditworthiness of
     customers.

     Changes in the allowance for doubtful accounts are as follows:


                                              2000           1999         1998
                                        ----------     ----------   ----------

At beginning of year                    US$ 13,561     US$ 23,543   US$ 17,522
  New allowances                            72,240         15,534       29,059
  Consolidation of Antarctica               21,440
  Recoveries, net of writeoffs             (43,502)       (17,846)     (21,394)
  Foreign exchange gains                    (4,817)        (7,670)      (1,644)
                                        ----------     ----------   ----------

At end of year                          US$ 58,922     US$ 13,561   US$ 23,543
                                        ==========     ==========   ==========


                                     F-55


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
------------------------------------------------------------------------------

8   Inventories


                                                         Year ended December 31
                                                  -----------------------------

                                                        2000               1999
                                                  ----------         ----------

Finished products                                 US$ 62,118         US$ 36,768
Work in process                                       22,252             14,727
Raw materials                                        128,962            108,750
Production materials                                  34,764             17,720
Bottles and crates                                     6,955              6,858
Maintenance materials                                 43,236             24,216
Other                                                  3,557              1,421
                                                  ----------         ----------

                                                 US$ 301,844        US$ 210,460
                                                 ===========        ===========


9    Prepaid expenses

     From 1988 to 1993, separate taxes on water consumption and sewage were
     levied on the Antarctica plant in Sao Paulo by Companhia de Saneamento
     Basico do Estado de Sao Paulo ("SABESP"). In 1996, Antarctica filed for a
     refund of all sewage taxes paid and SABESP agreed to pay US$ 28,618 by
     providing water to the Antarctica plant in Sao Paulo free of charge for a
     period of approximately eight years (the estimated usage period based on
     consumption levels and prices at that time). As part of the rationalization
     of operating capacity, the Antarctica plant was retired from service in
     2000 and a valuation allowance of US$ 8,712 was recorded to fully writeoff
     the remaining balance.

     In 1997 we became aware of a similar situation relating to sewerage levied
     on a plant in Rio de Janeiro. We filed a petition for a refund with the
     Poder Judiciario do Estado do Rio de Janeiro-1a. Vara da Fazenda Publica
     and in 1997, the court ruled in our favor and an asset of US$ 40,373 was
     recorded in 1997. The remaining balance due at December 31, 2000 totals US$
     22,664. Management is confident the remaining balance will be recovered by
     2005.


                                     F-56


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
------------------------------------------------------------------------------

10   Goodwill and intangible assets, net

                                                          2000            1999
                                                    ----------      ----------
Goodwill
  At beginning of year, net                         US$ 44,201      US$ 71,421
    Antarctica purchases (1) (*)                         1,825

    Adjustment to Antarctica purchase accounting
    (Note 1 (b)(iv))                                    16,612
    Acquisitions                                        11,538
    Amortization                                        (4,095)         (3,995)
    Foreign exchange losses                             (6,555)        (23,225)
                                                    ----------      ----------

  At end of year, net                               US$ 63,526      US$ 44,201
                                                    ----------      ----------

Intangible assets
  At beginning of year, net                          US$ 9,833      US$ 12,435
     Purchases                                          10,339           3,628
     Antarctica purchases (1)                           19,177
     Purchase accounting adjustments - Antarctica (1)
      Distributors network                              48,255
      Trademarks (2)                                   168,894
      Software                                           7,342
      Disposition of Bavaria (2)                       (29,127)
      Disposition - others                              (2,037)
      Amortization                                     (10,720)         (2,218)
      Foreign exchange losses                          (14,809)         (4,012)
                                                   -----------       ---------

  At end of year, net                              US$ 207,147       US$ 9,833
                                                   -----------       ---------

Total goodwill and other intangible assets, net    US$ 270,673      US$ 54,034
                                                   ===========      ==========

(1) Transferred from "Investment in Antarctica" upon consolidation on April 1,
    2000.

(2)  Includes trademarks of US$ 25,032 (Note 11) relating to the Bavaria
     brand which was disposed of as a result of the CADE ruling (Note 1(b)(ii)).


                                     F-57


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------

     Accumulated amortization of goodwill and intangible assets was US$ 29,830
     and US$ 21,637 at December 31, 2000 and 1999, respectively.

11   Property, plant and equipment

                                                              December 31, 2000
                              -------------------------------------------------
                                                 Accumulated
                                    Cost        depreciation               Net
                              ----------       ------------         ----------
Land                          US$ 58,561                            US$ 58,561
Buildings                        685,029       US$ (204,386)           480,643
Machinery and equipment        1,841,288         (1,130,627)           710,661
Bottles                           61,523            (15,429)            46,094
Crates                            50,912            (22,009)            28,903
Vehicles                          28,839            (17,749)            11,090
Equipment with third parties     108,972            (49,574)            59,398
Other                             54,759             (8,368)            46,391
                               ---------          ---------            -------

                               2,889,883         (1,448,142)         1,441,741
Construction in progress          54,838                                54,838
Impairment provision for assets
   to be disposed of or used     (24,034)                              (24,034)
                               ---------          ---------          ---------

                           US$ 2,920,687     US$ (1,448,142)     US$ 1,472,545
                           =============     ==============      =============


                                     F-58


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------


                                                              December 31, 2000
                              -------------------------------------------------
                                                 Accumulated
                                    Cost        depreciation               Net
                              ----------       ------------         ----------
Land                          US$ 40,057                            US$ 40,057
Buildings                        441,981           (118,912)           323,069
Machinery and equipment        1,233,401           (706,860)           526,541
Bottles                           51,387            (15,483)            35,904
Crates                            48,900            (19,120)            29,780
Vehicles                          15,552             (6,043)             9,509
Equipment with third parties      56,064            (19,755)            36,309
Other                              4,336               (756)             3,580
                              ----------        -----------         ----------

                               1,891,678           (886,929)         1,004,749
Construction in progress          21,158                                21,158
Impairment provision for assets
  to be disposed of or used       (3,121)                               (3,121)
                              ----------        -----------         ----------

                           US$ 1,909,715       US$ (886,929)     US$ 1,022,786
                           =============       ============      =============

     Under the CADE ruling, we were required to dispose of five plants (Note
     1(b)(iii)), one of which was owned by our affiliate, Miranda Correa. A
     summary of the gain on the disposition of the plants and the Bavaria brand
     as at November 30, 2000 is provided below:


                                                                   November 30,
                                                                          2000
                                                                    ----------
Tangible assets
(net of accumulated depreciation)
  Land                                                              US$ 20,944
  Buildings                                                             15,748
  Machinery and equipment                                               12,110
  Equipment with third parties                                           4,156
  Other                                                                     75
                                                                    ----------

                                                                    US$ 53,033
                                                                    ----------


                                     F-59


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
------------------------------------------------------------------------------



                                                                   November 30,
                                                                          2000
                                                                    ----------
Intangible assets
(net of accumulated amortization)
  Software                                                               5,321
  Trademark                                                             25,032
                                                                    ----------

                                                                        30,353
                                                                    ----------

Total assets disposed of                                            US$ 83,386
                                                                    ----------

Sales proceeds
Payment on December 22, 2000                                        US$ 92,311
Target market share adjustment - 2000                                   (3,468)
                                                                    ----------

Total non-contingent consideration                                  US$ 88,843
                                                                    ==========

Gain on disposition                                                  US$ 5,457
                                                                    ==========

     In 2000 we recognized an impairment provision of US$ 20,913 which was
     charged to "Other operating income (expense), net" (Note 3). Impaired
     assets consist principally of beer segment assets, which have a total
     carrying value of US$ 27,149. For the year ended December 31, 2000, the
     identified results of operations of these assets were nil.

     In 1999 we recognized an impairment provision of US$ 17,333 which was
     charged to "Other operating income (expense), net"(Note 3). Impaired assets
     consist principally of beer segment assets, which have a total carrying
     value of US$15,890. For the year ended December 31, 1999, the identified
     results of operations of these assets was approximately US$ 3,000. We
     scrapped US$ 14,212 of the impaired assets.


                                     F-60


<PAGE>


Companhia de Bebidas das Americas  AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
------------------------------------------------------------------------------

     The commissioning of new plants in December of 1998 marked the conclusion
     of this phase of our formal plan to increase installed capacity and
     modernize our plants. As a result, beginning in December 1998, management
     began a review of our operating capacity requirements by plant, geographic
     area and asset grouping. We identified certain plants and assets, primarily
     in our beer segment, with a carrying value of US$ 91,322 for inclusion in
     an impairment analysis. As a part of our overall analyses, we approved and
     committed for sale US$ 23,933 (1999 - US$ 7,386) of non-operational assets
     comprised of buildings (US$8,790) and land (US$ 15,143). Depreciation
     relating to such assets was terminated on transfer to "Assets held for
     sale".

     As required by SFAS No. 121, the assets held for sale have been reported at
     their carrying amounts, which are less than their fair market values. We
     have developed a plan for disposal of these assets which are no longer in
     service and are actively seeking buyers for the assets; however, the timing
     of any sales depends on prevailing market conditions. Construction in
     progress at December 31, 2000 and 1999, relates primarily to facility and
     equipment upgrades and operational improvements.

     To conform the accounting policies in Antarctica with the AmBev policies
     and production plans, as from April 1, 2000, management reviewed the
     estimate of useful lives for property, plant and equipment and accelerated
     the rate of depreciation for most assets. The revised depreciable lives
     have been applied on a prospective basis beginning on the date the CADE
     decision was issued in April 2000. The depreciable lives used in our
     subsidiary Antarctica, which we accounted for on the equity basis of
     accounting in 1999 are summarized below:


                                                                    Antarctica
                                                    --------------------------

                                                    Since April
                                                           2000           1999
                                                    -----------     ----------

                                                                         Years
                                                    --------------------------

Buildings                                                    25             40

Machinery and equipment, including equipment
with third parties                                      5 to 10        3 to 16
Bottles and crates                                            5              5
Vehicles                                                      5              5


                                     F-61


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------

     Had the new depreciable lives been used since on July 1, 1999, AmBev's
     equity in the losses of Antarctica in 1999 would have been US$ 188,153 (as
     reported - US$179,116) and AmBev's pro forma loss for the year would have
     been US$ 39,588 (as reported - US$ 30,551). The change in the estimated
     useful lives resulted in a reduction of our net income of approximately US$
     19,678 in the year ended December 31, 2000. Had the useful lives remained
     the same, the basic earnings per thousand shares in the year ended December
     31, 2000 would have been US$ 17.29 and US$ 15.72 for preferred and common
     shares, respectively (diluted - US$ 16.64 and US$ 15.13).

12   Short-term debt

                                                           2000           1999
                                                    -----------    -----------

Raw material import financing                       US$ 286,045    US$ 237,732
Working capital financing                               120,251         84,324
Equipment financing                                       9,910         25,128
                                                    -----------    -----------

                                                    US$ 416,206    US$ 347,184
                                                    ===========    ===========

     Short-term debt denominated in U.S. dollars at December 31, 2000 totaled
     US$ 335,784 (1999 - US$ 333,828) with a weighted average interest rate of
     approximately 7% at December 31, 2000 (1999 - 9%). Raw material import
     finance terms are normally for payment in a single installment on the 360th
     day. We have no formal lines of credit at December 31, 2000 providing for
     short-term borrowings. Our current liabilities are composed of short-term
     debt and the current portion of long-term debt.

(i)  Promissory notes

     In September 1999, Antarctica placed promissory notes (total proceeds
     US$ 155,892 at the date of issue), denominated in Brazilian reais, due in
     180 days, bearing interest at 15% per annum. In March 2000, the maturity
     date was extended for a further 180 days, with interest of 18% per annum.
     The notes were fully paid in September 2000.


                                     F-62


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
------------------------------------------------------------------------------

(ii) Debentures

     In 1996, a subsidiary of Antarctica issued 10,000 nonconvertible debentures
     (total proceeds US$ 96,209 at the date of issue), due December 1, 2001.
     Pursuant to the debenture agreement, interest for the first year was fixed
     at the National Association of Investment Bank and Securities Dealers
     ("ANBID") rate plus 1% per annum with annual repricing thereafter (to be
     effective from December 1 of each year). As of December 1, 1999 the
     following repricing had been approved:


     Period                                Rate (1)
     ------------------------------------  ----------------------------------

     December 1, 1997 - November 30, 1998  ANBID plus 1% per annum
     December 1, 1998 - November 30, 1999  ANBID plus 2% per annum
     December 1, 1999 - November 30, 2000  CDI (Interbank deposit certificate)
                                           plus 5% per annum
     Thereafter                            Undetermined


     (1) CDI variation from December 1, 1999 through June 30, 2000 was 10.50%.
         ANBID was 27.72% and 32.87% for the years ended December 31, 1998 and
         1997, respectively.

     Debenture holders had an option to cause the issuer to redeem their
     debentures annually on the repricing date. During 1998, 858 debentures were
     redeemed (redemption value - US$ 7,099). During 1999, 2,945 debentures were
     redeemed (redemption value - US$ 29,741). On August 14, 2000, 6,197
     debentures were redeemed (redemption value - US$ 39,185). No debentures are
     outstanding at December 31, 2000.


                                     F-63



<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------


13   Long-term debt

(a)  Summary

                                              Nominal
                                               annual   Year ended December 31,
                                             interest   -----------------------
                                Index(1)     rates - %         2000        1999
                                ----------   ---------  -----------  ----------
     Brazilian real
                                Reais          0 to 8                US$ 13,526
                                              8 to 10    US$ 10,238      11,317
                                TJLP           0 to 4       435,748     378,592
                                               4 to 6                    73,102
                                              6 to 12                     2,683

     U.S. dollar-denominated
                                               0 to 2           475       1,367
                                              2 to 10       131,972     179,635
                                             10 to 12         4,490       8,829
                                UMBNDES       2 to 10        24,138      23,989
                                                        -----------  ----------
                                                            607,061     693,040
                                                        -----------  ----------

     Less current portion                                  (201,932)   (227,185)
                                                        -----------  ----------

                                                        US$ 405,129 US$ 465,855
                                                        =========== ===========

     (1) UMBNDES    Weighted-average exchange rate variations on currencies,
                    predominantly U.S. dollars, held by BNDES (Brazilian
                    Economic and Social Development Bank), used to index
                    certain liabilities: 2000 - 9.5%; 1999 - 45.43%.

         TJLP       Long-term interest rate fixed by the government on a
                    quarterly basis: 2000 - 9.25%; 1999 - 12.50%.

         LIBOR      London Interbank Rate six month benchmark annual rate:
                    2000 6.1%; 1999 6.0%

We have several loans, principally for plant expansion, outstanding with
Brazilian governmental or multilateral agencies, including the International
Finance Corporation, BNDES and other Brazilian Government Agencies.


                                     F-64


<PAGE>


Companhia de Bebidas das Americas  AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------


(b)  BNDES line of credit

In July 1997, we entered into a line of credit agreement with the BNDES, which
was utilized for investments through 1998.



                                                   Balance             Balance
Annual                                          drawn down          drawn down
finance                                        December 31,        December 31,
charge                                                2000                1999
---------------------                        ---------------      -------------

TJLP + 3.1%                                      US$ 224,381        US$ 283,408
TJLP + 1.6%                                            5,744              7,535

                                                 US$ 230,125        US$ 290,943
                                             ===============       ============

     The line of credit is payable in 72 monthly installments with final
     maturities from July 2004 through July 2005. The original line of credit
     has been fully drawn down.

(c)  Project financing agreement - IFC

        We have loans from the IFC at December 31, 2000 totaling US$ 67,509
        (1999 - US$ 112,216), which contain certain restrictive covenants. The
        loans are U.S. dollardenominated and accrue annual interest of between
        2.5% and 2.75% above LIBOR, falling due in installments through June
        2003. The principal includes US$ 5,000 which may be converted into
        53,727 thousand of our preferred stock at the option of IFC.
        Restrictive covenants include a requirement to invest all the funds in
        the approved investment program, to maintain our industrial units, to
        comply with certain minimum liquidity and indebtedness ratios and with
        the environmental policy of the World Bank.


                                     F-65


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------

(d)  Long-term debt maturities


                                                             December 31, 2000
                                                            ------------------


2002                                                               US$ 161,525
2003                                                                   121,270
2004                                                                    74,432
2005                                                                    37,008
Thereafter                                                              10,894
                                                            ------------------

                                                                   US$ 405,129
                                                            ===================

(e)  Collateral

     The loans from the Brazilian Governmental Program Funds for Financing the
     Acquisition of Industrial Machinery and Equipment (FINAME), which are
     principally long-term, are secured by liens on equipment and machinery in
     the amount of approximately US$84,500. The loans from the BNDES and IFC
     are secured by mortgages on certain the plants of Brahma and CCBA S.A. in
     the amount of approximately US$ 411,600.The short-term financing of the
     raw materials, principally malt, are secured by issue of promissory
     notes.

14   Sales tax deferrals and other tax credits

     Certain states in Brazil provide tax incentives in the form of deferrable
     tax payments and partial or complete tax abatements for periods ranging
     from one to twenty years to promote investments in the region. We
     currently participate in programs whereby a percentage of payments of
     ICMS, due from sales generated by specific production facilities, are
     deferrable for periods of generally five years from their original due
     date. Percentages deferrable usually range from 75% in the first year to
     40% in the final year or a fixed percentage over the life of the program.
     Amounts deferrable under these programs are unlimited, except in the
     State of Santa Catarina, where we have reached the limit (US$ 50,313).
     Balances deferred generally accrue interest and are only partially
     inflationindexed, such adjustment being linked, in the majority of cases,
     from 60% to 80% of a local general price index. The amount deferred at
     December 31, 2000 includes US$ 181,722 which will become payable in 2003
     and the balance of US$ 126,669 becoming payable thereafter.


                                     F-66


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------


     We also participate in ICMS tax credit programs offered by various
     Brazilian states, which provide tax credits to offset ICMS tax payable.
     In return, we are committed to meet certain operational prerequisites
     including, depending on the state, volume production and employment
     targets, among others. The grants are received over the lives of the
     respective programs. During 2000, we recorded US$ 42,070 (1999 - US$
     35,202) of tax credits as a reduction of taxes on sales. No such benefits
     were recorded in 1998 as the preconditions had not yet been satisfied.
     The benefits granted are not subject to clawback provisions in the event
     we do not meet the program target; however, future benefits may be
     withdrawn.

15   Financial instruments and risk management

(a)  Concentration of credit risk

     Our sales are to distributors and directly to customers. Credit risk is
     minimized by the large customer base and ongoing control procedures,
     which monitor the creditworthiness of customers. Historically, we have
     not experienced significant losses on trade receivables. In order to
     minimize credit risk from investments, we have adopted policies
     restricting cash and/or investments that may be allocated among financial
     institutions, which take into consideration monetary limits and financial
     institution credit ratings.

(b)  Foreign exchange and interest rate risk management

     Off-balance sheet derivative financial instruments at December 31, 2000
     include foreign currency forward contracts and foreign currency swap
     agreements. During 2000, we also entered into interest rate swap
     agreements, although none were outstanding at December 31, 2000.


                                     F-67


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------


     We enter into short-term foreign currency forward exchange contracts to
     mitigate foreign exchange risk on U.S. dollar-denominated debt, financing
     of imports and payables to foreign suppliers. These contracts reduce the
     risk to our financial positions and results of operations of changes in
     the underlying foreign exchange rate. The contracts are marked-to-market
     and the realized and unrealized gains and losses on these financial
     instruments used as hedges of foreign currency cash flow exposures are
     reported in the statement of operations and included in the amounts
     reported in "Financial income" and "Financial expenses". At December 31,
     2000, we had 29 foreign currency forward contracts outstanding of which
     the notional amount is US$ 220,000.

     We enter into short-term foreign currency swap agreements (principally for
     U.S. dollars), to mitigate foreign exchange risk on U.S.
     dollar-denominated debt, financing of imports and payables to foreign
     suppliers. The swap agreements are marked-to-market and the realized and
     unrealized gains and losses on these financial instruments used as hedges
     of foreign currency cash flow exposures are reported in the statement of
     operations and included in the amounts reported in "Financial income" and
     Financial expenses". At December 31, 2000, we have 5 foreign currency
     swap agreements outstanding of which the notional amount is US$ 113,112.

     We enter into short-term foreign currency future contract agreements
     (principally for U.S. dollars) to mitigate foreign exchange risk on U.S.
     dollar-denominated debt, financing of imports and payables to foreign
     suppliers. The future contract agreements are marked-to-market and the
     realized and unrealized gains and losses on these financial instruments
     used as hedges of foreign currency cash flow exposures are reported in
     the statement of operations and included in the amounts reported in
     "Financial income" and Financial expenses". At December 31, 2000, we have
     1,150 foreign currency future contract agreements outstanding of which
     the notional amount is US$ 57,500.


                                     F-68


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------


     Off-balance sheet financial instruments outstanding at December 31, 2000,
     held for purposes other than trading, were as follows:

<TABLE>
<CAPTION>
<S>                              <C>           <C>           <C>       <C>
                                             Notional
                                          outstanding   Fair market  Fair market
Description                    Currency        amount    value gain   value loss
------------------  -------------------  ------------  ------------  -----------


Foreign currency
  Forward contracts              R$/US$        47,000           128
                    Argentine pesos/US$   US$ 220,000                    (2,591)
  Swaps                          R$/US$       113,112         3,507      (1,165)
  Future contracts               R$/US$        44,000
                    ------------------    -----------    ----------   ---------

 Total                                     US$ 424,112        3,635      (3,756)
                                          ============   ==========   ==========
</TABLE>

     The notional outstanding amounts do not represent amounts exchanged by
     the parties and, thus, are not a measure of our exposure through use of
     derivatives. The amounts exchanged during the term of the derivatives are
     calculated on the basis of the notional amounts and the other contractual
     conditions of the derivatives, which relate to interest rates and foreign
     currency exchange rates.

     Net gains (losses) from derivative activities totaled (US$ 104), US$
     118,709, and (US$ 22,267), for the years ended December 31, 2000, 1999
     and 1998, respectively.

(c)  Fair value of financial instruments

     The carrying amount of our current financial instruments generally
     approximates fair market value because of the short-term maturity or
     frequent repricing of these instruments. In estimating the fair value of
     our derivative positions, we utilized quoted market prices, if available,
     or quotes obtained from outside sources. Fair market value estimates are
     made at a specific point in time, based on relevant market information
     and information about the financial instrument.


                                     F-69


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------

16   Shareholders' equity

(a)  Capital and shareholders' rights

(i)  Capital

     At December 31, 2000, AmBev's subscribed and paidin capital comprises
     22,669,744 thousand preferred shares and 15,976,336 thousand common
     shares (1999 - 21,790,073 thousand preferred shares and 16,012,476 thousand
     common shares), all of no par value.

     The shares held by the Zerrenner Foundation, despite being classified as
     treasury shares, accrue voting and distribution rights consistent with
     the outstanding shares.

     Extraordinary Shareholder Meetings on January 17, April 28 and September
     22, 2000 approved the reduction of capital without altering the number of
     shares. The amounts were transferred to offset the accumulated deficit in
     our statutory books as part of our dividend distribution strategy.
     Capital distributions to shareholders on March 23 and November 30, 2000,
     totaling US$ 61,105, were equivalent to US$ 2.33 per common and preferred
     share. The combination of Brahma and Antarctica and the Antarctica and
     Brahma Conversions (Note 1(b)) affected AmBev's share capital structure.

(ii) Stock split

     On October 20, 2000 AmBev's Extraordinary Shareholders Meeting approved a
     five-for-one stock split of common and preferred shares of AmBev. All
     references in these financial statements to numbers of shares, per share
     amount and market price of the our common and preferred shares have been
     restated to reflect the increased number of shares outstanding, unless
     otherwise stated.

(iii) American depositary receipts and stock exchange listings

     Common and preferred shares of Brahma were historically traded on various
     stock exchanges in Brazil. In June 1997, American Depositary Receipts
     ("ADRs") representing 100 preferred shares and ADRs representing 100
     common shares of Brahma were listed on the New York Stock Exchange.


                                     F-70


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------

     On September 17, 1999, shares of AmBev began trading on the BOVESPA, the
     Sao Paulo Stock Exchange. Upon completion of the Brahma Conversion on
     September 14, 2000, all outstanding shares of Brahma and the related ADRs
     were automatically exchanged for AmBev shares and ADRs. On September 15,
     2000, AmBev ADRs began trading on the New York Stock Exchange and shares
     of Brahma ceased to trade on the BOVESPA and on the New York Stock
     Exchange.

(iv) Share rights

     Our preferred shares are nonvoting but have priority in the return of
     capital in the event of liquidation. In the event of a liquidation of
     AmBev, the net assets of the Zerrenner Foundation would not be available
     to the creditors of AmBev. Our common shares have the right to vote at
     shareholder meetings. Under its by-laws, AmBev is required to distribute
     to shareholders as a mandatory dividend in respect of each fiscal year
     ending on December 31 an amount equal to not less than 27.5% of its net
     income determined under Brazilian Corporation Law, as adjusted in
     accordance with such law, unless payment of such amount would be
     incompatible with AmBev's financial situation. The mandatory dividend
     includes amounts paid as interest attributed to shareholders' equity,
     which is equivalent to a dividend but is a more taxefficient way to
     distribute earnings, because it is deductible for tax purposes.

     As from 1997, and as reflected in the determination of earnings per
     share, preferred shares are entitled to a dividend premium of 10% over
     that received by the common shareholders. Earnings per share amounts for
     all years presented have been determined as though all earnings would be
     distributed. For the year ended December 31, 2000, the aggregate dividend
     (including interest attributed to shareholders' equity) distribution to
     shareholders was 34.2% of adjusted net income, based on Brazilian
     Corporation Law.


                                     F-71


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------


(v)  Subscription warrants

     In February 1996, our Board of Directors approved the private placement
     of 2,024,653 thousand subscription warrants, of which 1,314,457 thousand
     were for subscription of preferred shares valued at US$ 13,393, and
     710,195 thousand were for subscription of common shares valued at US$
     7,218. The subscription price for each of the warrants is adjusted
     pursuant to the IGP-M inflation index, reduced by dividends paid, and
     accrues interest at the rate of 12% per year. Each warrant has the right
     to subscribe for one share and may be exercised during April 2003 at the
     total exercise price of US$ 357,270 (at the December 31, 2000 exchange
     rate) for preferred shares and US$ 193,031 (at the December 31, 2000
     exchange rate) for common shares. This ratio will be adjusted
     proportionately should there be any stock splits, reverse splits or
     similar events.

     On September 15, 2000 the Brahma warrants were exchanged for AmBev
     warrants. These entitle holders to the AmBev warrants to the same terms
     as under Brahma's warrant agreements.

(vi) Share repurchase program

<TABLE>
<CAPTION>

                                                           Thousands of shares
                                            ----------------------------------

                                            Authorized               Purchased
                                            ----------   ---------------------

Program approval                             Preferred      Common   Preferred     Common          Cost
----------------------------------------    ----------    --------   ---------    -------   -----------
<S>                                         <C>           <C>        <C>          <C>       <C>


November 14, 1997
    (extended to May 14, 1998)               2,163,505     412,835   809,425      303,990   US$ 139,892

May 12, 1998
    (extended to August 10, 1998)            1,290,110     392,455   398,010      121,320        61,409

August 10, 1998
    (extended to November 8, 1998)             862,605     255,850   549,460        5,795        49,403

November 10, 1998
    (extended to February 7, 1999)             259,230     221,330    64,960       20,245         7,010

February 9, 1999
    (extended to July 1, 1999)               2,024,660     318,585                 36,140         2,926

December 13, 2000
    (extended to March 13, 2001)             2,107,032     396,369                 26,289         5,381

</TABLE>

                                     F-72


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------


     These shares have been recorded in treasury shares.

(b)  Additional paid-in capital

     The additional paid-in capital is comprised of adjustments arising from
     stock purchase warrants, outstanding employee stock options, Brahma
     Welfare Foundation and Zerrenner Foundation shares in AmBev at cost,
     cancellation of treasury shares and other additional paid in capital.
     Additional paid-in capital - other consists of the following items:


<TABLE>
<CAPTION>
                                                                               Year ended December 31,
                                                      ------------------------------------------------

                                                             2000              1999               1998
                                                      -----------       -----------        -----------
<S>                                                   <C>               <C>                <C>

Analysis of Additional paid-in capital - other

Consolidation of Zerrenner Foundation                 US$ 526,040
Transfer from unappropriated earnings                     393,506       US$ 393,506        US$ 218,109
Transfer from tax incentive reserves                       22,175            22,175             22,175
Capitalization of expenses paid-in
    on behalf of AmBev                                     15,701             3,575
Capitalization of unappropriated earnings                   3,732             3,732              3,732
Gain on sale of treasury shares                               202               202                202
Other                                                      12,516            12,516             12,516

                                                      US$ 973,872       US$ 435,706        US$ 256,734
                                                      ===========       ===========        ===========

</TABLE>


(c)  Appropriated retained earnings

(i)  Statutory reserve

     Under Brazilian Corporation Law, we, together with our Brazilian
     subsidiaries, are required to appropriate an amount not less than 5% of
     net income after absorbing accumulated losses, to a statutory reserve.
     The reserve may be used to increase capital or absorb losses, but may not
     be distributed as dividends.


                                     F-73


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------


(ii) Tax incentive reserve

     The tax incentive reserve results from an option to apply a portion of
     income tax otherwise payable for the acquisition of capital stock of
     companies undertaking specified governmentapproved projects. The amount
     is credited to income tax and subsequently appropriated from retained
     earnings to this reserve. No provisions are made unless the corresponding
     capital reserve, presented in the financial statements prepared in
     accordance with the Brazilian Corporation Law, is used to pay dividends.
     We do not intend to pay dividends out of our capital reserves, as such
     amounts are generally restricted to distribution in the form of
     dividends.

(d)  Unappropriated retained earnings

     Our by-laws require that we appropriate at least 5% of statutory adjusted
     net income to a reserve for investments; such appropriation cannot exceed
     68.9% of net income.

     Dividend distributions are limited to our retained earnings as determined
     in accordance with the Brazilian Corporation Law. Distributable retained
     earnings are limited to the amount provided for in our statutory
     financial statements. At December 31, 2000 AmBev has reserves available
     for distribution totaling the equivalent of US$ 248,225 (at the current
     exchange rate) in its statutory books.

(e)  Advances for purchase of shares

     AmBev (and formerly Brahma) operates a stock ownership plan and finances
     the purchase of shares of certain designated employees and directors
     (Note 16 (i)). Financing arrangements are normally for periods not
     exceeding five years and accrue interest of 8% per year over a designated
     general price index.

(f)  Dividends

     Dividends are payable in Brazilian reais and may be converted into United
     States dollars or other foreign currencies and remitted to shareholders
     abroad provided that the nonresident shareholders' capital is registered
     with the Brazilian Central Bank.


                                     F-74


<PAGE>


Companhia de Bebidas das Americas  AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------


(g)  Interest attributed to shareholders' equity

     Brazilian companies are permitted to pay limited amounts to shareholders
     and treat such payments as an expense for Brazilian income and social
     contribution tax purposes. This notional interest distribution is treated
     for accounting purposes as a deduction from shareholders' equity in a
     manner similar to a dividend. A 15% tax is withheld and paid by AmBev
     upon credit of the interest. Interest attributed to shareholders' equity
     is treated as a dividend for purposes of the mandatory dividend payable
     by AmBev. The shareholders will consider a proposal to provide for
     interest attributed to shareholders' equity of US$ 88,404 in respect of
     the year ended December 31, 2000.

(h)  Payroll, profit sharing and related charges

     Our by-laws provide for the distribution to employees of up to 10% of
     consolidated net income, determined in accordance with the Brazilian
     Corporation Law. Executive officers are entitled to profit sharing in an
     amount not to exceed their annual remuneration or a pro rata share of 5%
     of net income in the aggregate, whichever is lower. Payments under this
     profit sharing plan are subject to the availability of our cash
     resources. The distribution of additional bonuses is determined based on
     attainment of individual and group performance and efficiency targets as
     approved by our Board of Directors. Expenses incurred under the
     performance-based compensation programs, are included in "General and
     administrative expenses" and amounted to US$ 29,349 (paid to employees
     US$ 26,195; executive officers - US$ 3,154) in the year ended December
     31, 2000 (1999 - employees - US$ 1,862; executive officers - US$ 0; 1998
     - employees US$ 29,849; executive officers - US$ 6,569). Liabilities for
     accrued profit sharing totaled US$ 28,648 at December 31, 2000. The
     yearend provision is an estimate made by our management as the final
     determination of the amount payable is not available at the date of
     preparation of the financial statements. Amounts paid with respect to the
     program may differ from the liability accrued.


                                     F-75


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------


(i)  Stock ownership plan

     AmBev's stock ownership plan (the "Plan"), which succeeded the Brahma
     stock ownership plan on September 15, 2000 is designed to obtain and
     retain the services of executives and certain employees. Both common and
     preferred shares are granted in the Plan.

     The Plan is administered by a committee comprised of non-executive members
     of our Board of Directors. This committee periodically creates stock
     ownership programs and sets the terms, vesting requirements and employees
     to be included and establishes the price at which the preferred and
     common shares are to be issued. This price cannot be less than 90% of the
     average price of the shares traded on the BOVESPA in the previous three
     business days, inflation-indexed through the date the option is granted.
     The number of shares which may be granted each year under the Plan cannot
     exceed 5% of the total number of shares outstanding of each type of
     shares at that date. When share options are exercised, we either issue
     new shares or transfer treasury shares to the option holder. The share
     options granted to date do not specify a final date by which they must be
     exercised. If an employee leaves us (other than upon retirement) any
     unexercised options are forfeited and AmBev may repurchase shares
     acquired on exercise of the options, at its option, at a price equal to
     (i) the inflation-indexed price paid by such employee, if the employee
     leaves during the first thirty months after the exercise of such option,
     (ii) 50% of the inflation-indexed price paid, and 50% of the prevailing
     market price, if the employee leaves after the first thirty months but
     before the sixtieth month after the exercise of such option, and (iii)
     the market price thereafter.

                                             2000            1999         1998
                                       ----------      ----------    ---------

Outstanding (in thousands of shares)
At beginning of year                    2,168,655       1,861,750    1,805,545

    Granted                                66,500         658,000      728,245
    Exercised                            (879,671)       (196,635)    (554,050)
    Forfeited                            (114,129)       (154,460)    (117,990)

At year end - outstanding and
    exercisable                         1,241,355       2,168,655    1,861,750

Shares available at end of each year
    for options that may be granted in
    the subsequent year                 1,932,304       1,731,395    1,820,600
                                        ==========      =========    =========


                                     F-76


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999

Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------


<TABLE>
<CAPTION>

                                                                        2000               1999               1998
                                                               -------------       ------------       ------------

<S>                                                            <C>                 <C>                <C>

Range of exercise prices for outstanding options               US$  31.21 to       US$ 25.95 to       US$ 22.31 to
    (US$ per thousand shares)                                     US$ 185.31              73.31          US$ 97.47

Weighted average grant-date quoted market price
    of shares (US$ per thousand shares) (based on
    quoted market value at date granted)                              216.83              76.97              82.15

Weighted average grant-date exercise price of
    options (US$ per thousand shares)                             US$ 185.31          US$ 66.83          US$ 67.10

Weighted average grant-date value (difference
    between quoted market price and exercise price)
    of options granted during the year
    (US$ per thousand shares)                                      US$ 31.52          US$ 10.14          US$ 15.05
                                                               =============      =============       ============

Compensation cost recognized in the statement of operations was US$ 5,496, US$
4,593, and US$ 4,512 at December 31, 2000 1999, and 1998 respectively.

</TABLE>

<TABLE>
<CAPTION>
                                                                        2000               1999               1998
                                                               -------------       ------------       ------------

<S>                                                            <C>                 <C>                <C>

Weighted-average exercise prices
         (US$ per thousand shares)
At beginning of year                                               US$ 77.68          US$ 79.46          US$ 83.47
         Granted                                                      185.31              66.83              67.10
         Exercised                                                     59.73              43.77              74.08
         Forfeited                                                     84.11              68.13              76.03

                                                               -------------        -----------        -----------

At end of year                                                     US$ 86.35          US$ 77.68          US$ 79.46
                                                               =============      =============       ============


</TABLE>


                                                   F-77


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
-------------------------------------------------------------------------------

Outstanding and exercisable:

<TABLE>
<CAPTION>
                                                                                        Weighted-average
Range of                                                                                  exercise prices
exercise prices                      Number of shares (thousands)                (US$ per thousand shares)
(US$ per                    -------------------------------------    ------------------------------------
thousand shares) (1)             2000          1999          1998         2000         1999          1998
                            ---------     ---------     ---------    ---------    ---------     ---------
<S>                         <C>           <C>           <C>          <C>          <C>           <C>

31.21 - 47.46                  31,202        85,675       176,947    US$ 44.67    US$ 43.85     US$ 43.86

47.47 - 63.78                  28,963       141,733       162,595        60.97        60.97         60.97

63.79 - 67.70                 649,610     1,223,497       728,245        67.09        67.23         67.10

67.71 - 96.94                 182,109       305,052       349,746        91.72        91.72         91.72

96.95 - 185.31                349,471       412,698       444,217       125.17       111.04        111.04
                            ---------     ---------     ---------    ---------    ---------     ---------


                            1,241,355     2,168,655     1,861,750    US$ 86.35    US$ 77.68     US$ 79.46
                            =========     =========     =========    =========    =========     =========

</TABLE>

(1) Ranges of exercise prices have been translated at their historical U.S.
    dollar amounts.


     We have calculated the pro forma effects of accounting for the Plan in
     accordance with SFAS No. 123 "Accounting for Stock Based Compensation".
     Had compensation cost for the Plan been determined based on the fair
     value at the grant date in accordance with the provisions of SFAS No.
     123, our net income and earnings per thousand shares would have been as
     follows:


                               2000                  1999                  1998
                        -----------        --------------        --------------

Net income - pro forma  US$ 608,952        US$ 169,481(*)        US$ 224,049(*)

Earnings per thousand
shares - pro forma
    Basic
       Preferred          US$ 17.45              US$ 5.29              US$ 6.86
       Common                 15.87                  4.81                  6.24

    Diluted
       Preferred              16.80                  5.06                  6.52
       Common                 15.27                  4.60                  5.93


(*) As the stock ownership plan only relates to Brahma, the pro forma net
income of Brahma has been presented.



                                     F-78


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
------------------------------------------------------------------------------


These pro forma results are not necessarily indicative of future amounts.

The fair value of each option granted was estimated on the date of grant using
the BlackScholes optionpricing model with the following weighted average
assumptions used for grants in 2000: dividend yield 5% (1999 - 19%, 1998 -
10%), expected volatility 49% (1999 -  48%, 1998 - 59%), riskfree interest
ratenominal terms  16.5% (1999 -  19%; 1998 -  30%) and expected lives of
three years for all periods.


                                             2000           1999           1998
                                       ----------     ----------     ----------


Weighted average grant date fair value

    (US$ per thousand shares)          US$ 168.77      US$ 32.38      US$ 50.80
                                       ==========     ==========     ==========


Market value of options granted in the
year, all of which were less than the
quoted market price of the stock on
grant date (in thousands)              US$ 11,224     US$ 21,308     US$ 36,998
                                       ==========     ==========     ==========

(j)               Earnings (loss) per share

The tables below present the determination of net income (loss) available to
common and preferred shareholders and weighted average common and preferred
shares outstanding used to calculate basic and diluted earnings (loss) per
share for each of the years presented.

Furthermore, purchases of shares by the Brahma Welfare Foundation and the
consolidation of the Zerrenner Foundation following the legal merger with the
Brahma Welfare Foundation have had the effect of reducing the number of
outstanding shares in the year as follows:


                                     F-79



<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                       Year ended December 31,
                         -----------------------------------------------------

                                                              Number of shares
                         -----------------------------------------------------

                                    2000                1999              1998
                         ---------------    ----------------   ---------------

<S>                      <C>                <C>                <C>

AmBev Preferred Shares

   At beginning of year    (171,052,200)       (153,496,520)     (100,015,745)
   Purchase of shares       (31,271,040)        (17,555,680)      (53,480,775)
   Consolidation of
    Zerrenner Foundation   (269,343,425)
                          -------------        ------------     --------------

   At end of year          (471,666,665)       (171,052,200)     (153,496,520)
                          -------------        ------------     --------------


AmBev Common Shares

   At beginning of year  (1,323,696,770)     (1,304,446,770)   (1,304,446,770)
   Purchase of shares                           (19,250,000)
   Consolidation of
    Zerrenner Foundation (2,297,608,640)
                         --------------      --------------     -------------

   At end of year        (3,621,305,410)     (1,323,696,770)   (1,304,446,770)
                         --------------      --------------     -------------

</TABLE>




                                     F-80



<PAGE>



Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                                      AmBev shares                                   AmBev shares
                                        ------------------------------------------     ------------------------------------------
                                                              At December 31, 2000                           At December 31, 1999
                                        ------------------------------------------     ------------------------------------------
                                            Preferred        Common          Total         Preferred         Common          Total
                                        -------------   -----------   ------------     -------------    -----------   ------------

<S>                                     <C>             <C>           <C>              <C>             <C>           <C>
Basic numerator
  Actual dividends declared               US$ 65,980    US$ 39,036    US$ 105,016         US$ 4,709    US$ 105,585   $US 110,294
  Basic allocated undistributed
    earnings (loss)                          325,287       192,539        517,826           (24,238)      (116,607)     (140,845)
                                        -------------   -----------   ------------     -------------   ------------  ------------

Allocated net income (loss) available
  for common and preferred shareholders      391,267       231,575        622,842           (19,529)       (11,022)      (30,551)
                                        =============   ===========  ============      =============   ============  ============

Basic denominator
  Weighted average shares
  (in thousands)                          21,919,724    14,265,323     36,185,047        21,173,565     11,949,367    33,122,932
                                        =============   ===========  ============      =============   ============  ============

 Basic earnings (loss) per thousand
 shares                                    US$ 17.85     US$ 16.23                         US$ (0.92)   US$   (0.92)
                                         =============   =========                     =============    ===========

Diluted numerator
 Actual dividends declared                US$ 65,980    US$ 39,036    US$ 105,016         US $4,709    US$ 105,585    US$ 110,294
 Diluted allocated undistributed
   earnings (loss)                           330,759       187,067        517,826           (24,479       (116,366       (140,845

 Allocated net income (loss) available for
 common and preferred shareholders           396,739       226,103        622,842           (19,770        (10,781        (30,551
                                          ==========    ==========    ===========         =========     ==========    ===========

Diluted denominator
 Stock options                               784,006                                        737,065
 Warrants                                    386,795       209,948                          473,515        257,025
                                          -----------   ----------                         --------      ----------


 Diluted weighted average shares (in
  thousands)                              23,090,525    14,475,271     37,565,796        22,384,145      12,206,392    34,590,537
                                          ==========    ==========     ==========        ==========      ==========    ==========

 Diluted earnings (loss) per thousands
  shares (US$)                             US$ 17.18     US$ 15.62                        US$(0.88)      US$(0.88)
                                          ==========    ==========                       ==========      ==========
</TABLE>



                                                            Brahma shares
                                        ---------------------------------------

                                                     At December 31, 1998
                                        ---------------------------------------

                                       Preferred         Common           Total


Basic numerator                        US$ 120,600    US$ 60,449     US$ 181,049
 Actual dividends declared                  38,320        19,208          57,528
 Basic allocated undistributed
   earnings (loss)                     -----------    ----------     -----------

Allocated net income (loss) available
for common and preferred shareholders      158,920        79,657         238,577
                                        ==========    ==========     ===========

Basic denominator
Weighted average shares (in thousands)  21,733,635    11,983,100      33,716,735
                                        ==========    ==========     ===========

Basic earnings (loss) per thousand
shares                                    US$ 7.32      US$ 6.65
                                        ==========    ==========

Diluted numerator
 Actual dividends declared             US$ 120,600    US$ 60,449     US$ 181,049
 Diluted allocated undistributed            39,510        18,018          57,528
  earnings (loss)                       ----------    ----------     -----------

Allocated net income (loss) available
for common and preferred shareholders      160,110        78,467         238,577
                                        ==========    ==========     ===========

Diluted denominator
 Stock options                             540,175        24,048
 Warrants                                  784,974       426,095
                                        -----------   ----------

Diluted weighted average shares
 (in thousands)                         23,058,784    12,433,243     35,492,027
                                        ===========   ==========     ==========


Diluted earnings (loss) per thousands
  shares (US$)                             US$6.94       US$6.31
                                        ===========   ==========


                                     F-81



<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
------------------------------------------------------------------------------

(i)  We calculate earnings per share on common and preferred shares under the
     "two-class method". Effective January 1, 1997, preferred shareholders are
     entitled to receive per share dividends of at least 10% greater than the
     per share dividends paid to common shareholders. Undistributed earnings,
     therefore, from January 1, 1997 forward, have been allocated to common
     and preferred shareholders on a 100 to 110 basis, respectively, based
     upon the weighted average number of shares outstanding during the period
     to total shares (allocation percentage).

For purposes of computing diluted earnings per share, stock options are
assumed to be converted into preferred or common shares as of the date of
issuance of the security using the treasury stock method.

All references to the number of preferred and common shares and per share
amounts have been restated to give retroactive effect to the stock split for
all periods presented.

17   Employee benefits

(a)  The AmBev Pension Plan

     The AmBev Pension Fund sponsors a defined-benefit pension plan and
     operates a defined-contribution plan, which supplements benefits that the
     Brazilian government social security system provides to our employees and
     those of our Brazilian subsidiaries. These plans are administered by the
     AmBev Pension Fund, Instituto AmBev de Previdencia Privada - which is the
     successor of the Brahma Pension Fund - Instituto Brahma de Seguridade
     Social as from December 8, 2000.

     The AmBev Pension Fund was established solely for the benefit of our
     employees and its assets are held independently. We nominate the three
     directors to the AmBev Pension Fund. Currently, we have 5,332
     participants in our plan (1999 - 5,951), of which 2,389 (1999 - 2,549)
     participate in the defined benefit plan. We contributed 3.1% and 5.4% of
     each employee nominal salary to the defined benefit plan and to the
     defined contribution plan, respectively.

     The AmBev Pension Fund is available to both active and retired employees.
     Three months after joining us, employees may opt to join the AmBev
     Pension Fund. Upon leaving the employ of AmBev (unless upon retirement),
     members are required to leave the AmBev Pension Fund. Members who joined
     after 1990 and leave will receive their contributions actualized in a
     single installment for both the defined benefit and defined contribution
     plan.



                                     F-82



<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
------------------------------------------------------------------------------

     Prior to May 1998, there was only a defined benefit plan, when a defined
     contribution plan was launched. The defined benefit plan was closed to
     new participants as of that date. New employees of AmBev can only join
     the defined contribution plan. At the time of adoption of the defined
     contribution plan, active participants were given the option to either
     remain in the old plan, or transfer their accumulated benefits to the
     defined contribution plan. The defined contribution plan covers
     substantially all new employees. Contributions by AmBev under the plan
     are determined based on a percentage of participant salaries. Pension
     cost relating to the defined contribution plan for the year ended
     December 31, 2000 was approximately US$ 1,538 (1999 - US$ 1,709).

(b)  The Antarctica Pension Plan

     For the former employees of Antarctica, AmBev is the sponsor of the
     Antarctica Normal Plan, which is a defined contribution plan, and the
     Antarctica Special Plan, which is a defined benefit plan. The Antarctica
     Normal Plan is available to substantially all active former employees of
     Antarctica. This plan provides for employer participation based primarily
     on employee participation. The total expense under the Antarctica Normal
     Plan was US$ 1,999 in the year ended December 31, 2000 (1999 - US$ 1,643).
     The Antarctica Special Plan was established in August 1995 to provide
     benefits to retiring employees and their beneficiaries. Plan eligibility
     is contingent upon age and salary level as of such date, which included
     an additional group of employees who would retire over the following few
     years. The plan has 144 participants in payment status as of December 31,
     2000 (1999 - 144). The benefits paid to participants of the Antarctica
     Special Plan are based on final salary.

(c)  Funded status of AmBev Pension Fund and Antarctica Pension Plans

     Based on the report of our independent actuary, the funded status and
     amounts recorded in our balance sheet are presented in accordance with
     SFAS No. 132, "Employer's Disclosures about Pensions and other
     Post-retirement Benefits", as follows:


                                     F-83



<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
------------------------------------------------------------------------------



                                                         AmBev and Antarctica
                                                                Pension Funds
                                           ----------------------------------


Change in benefit obligation                        2000                 1999
                                         ---------------        -------------


Net benefit obligation at beginning
of year                                       US$ 92,147          US$ 132,569
    Consolidation of Antarctica                   18,719
    Service cost                                   2,639                3,789
    Interest cost                                  8,525                6,839
    Actuarial loss                                 5,691               13,983
    Amendments                                    24,413
    Curtailments                                  (3,542)              (3,178)
    Settlements                                   (6,139)             (10,322)
    Gross benefits paid                          (10,758)              (8,073)
    Foreign exchange gains                       (10,152)             (43,460)


    Net benefit obligation at end of year    US$ 121,543           US$ 92,147
                                          ===============       ==============

Change in plan assets

Fair value of plan assets at beginning
of year                                      US$ 149,186          US$ 191,674
    Actual return on plan as                      17,642               33,414
    Employer contributions                           312                  769
    Plan participants' contribu                      989                1,927
    Gross benefits paid                           (8,760)              (8,073)
    Settlements                                   (5,947)              (8,406)
    Foreign exchange losses                      (11,973)             (62,119)
                                         ---------------       --------------

Fair value of plan assets at end of year     US$ 141,449          US$ 149,186
                                         ===============       ===============

Funded status at end of year                  US$ 19,906           US$ 57,039
Unrecognized net actuarial gain                  (23,977)             (37,131)
Unrecognized prior service cost                   22,851
Unrecognized net transition obligation             1,016                1,755
                                         ---------------       ---------------
Prepaid benefit cost                          US$ 19,796           US$ 21,663
                                         ===============       ===============



                                     F-84



<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
------------------------------------------------------------------------------



Included within the fair value of the AmBev Pension Fund's plan assets as of
December 31, 2000 and 1999 are 9,595,170 of our preferred shares and
88,664,850 of our common shares, with a total fair value of US$ 23,618 (1999 -
US$ 14,500) at that date.



                                                                     AmBev and
                                                      Antarctica Pension Funds
                                                ------------------------------


                                                      2000(1)          1999(1)
                                                -------------     ------------

Weighted-average assumptions
    as of December 31
Discount rate                                           8.12%            8.12%
Expected return on plan assets                          8.12%            8.12%
Rate of compensation increase                           5.10%            5.10%


(1) Expressed in nominal terms

                                                                     AmBev and
                                                      Antarctica Pension Funds
                                                ------------------------------
                                                        Year ended December 31
                                                ------------------------------


Components of net periodic                 2000           1999            1998
  benefit cost                     ------------   ------------    ------------
Service cost                          US$ 2,639      US$ 3,789       US$ 8,198
Interest cost                             8,525          6,839          11,727
Expected return on assets               (11,747)       (10,107)        ( 3,581)
Amortization of
  Transition obligation/assets              389            384             614
  Actuarial gain                         (2,760)        (2,532)
Employee contributions                   (1,771)        (2,705)         (5,590)

Total net periodic benefit cost
(benefit)                            US$ (4,725)    US$ (4,332)      US$ 1,368
                                     ==========================================



                                     F-85



<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
------------------------------------------------------------------------------

(d)  Brahma Welfare Foundation

     The Brahma Welfare Foundation was formed in 1983 to provide medical,
     dental, educational, sporting and social assistance to sponsoring
     employees and their dependents. Beneficiaries pay up to a maximum of 50%
     of the cost of medical and dental consultations and the balance remaining
     is paid by the Brahma Welfare Foundation. In-patient health services are
     normally fully covered by the Brahma Welfare Foundation. The Brahma
     Welfare Foundation also offers medical assistance to approximately 1,200
     former employees and their 1,500 dependents. The Brahma Welfare
     Foundation primarily administers its medical and dental assistance
     through independent health providers.

     On October 27, 2000, the Zerrenner Foundation assumed all the assets and
     obligations of the Brahma Welfare Foundation, whereupon the latter ceased
     to exist (Note 2(m)).

(e)  Zerrenner Foundation

     The Zerrenner Foundation provides medical, dental, educational and social
     assistance to current and retired employees of AmBev and their
     beneficiaries and covered dependents (approximately 30,180 beneficiaries
     and dependents at December 31, 2000 and 23,500 beneficiaries at December
     31, 1999 under the Brahma Welfare Foundation). At our option, we may
     contribute up to 10% of our Brazilian Corporation Law consolidated net
     income to support the Zerrenner Foundation (Note 21(b)).

     Prior to June 30, 1999, the principal shareholder of Antarctica was the
     Zerrenner Foundation, a trust, which is currently a shareholder of AmBev.
     On October 27, 2000, the Zerrenner Foundation legally assumed the assets
     and the liabilities of the Brahma Welfare Foundation upon the merger of
     the Brahma Welfare Foundation into the Zerrenner Foundation. Consistent
     with the accounting treatment applied to the Brahma Welfare Foundation,
     because of the significant influence AmBev exerts over the investing
     decisions of the Zerrenner Foundation, our right to nominate certain
     trustees, the disbursements made by the Zerrenner Foundation, in most
     cases, for the exclusive benefit of our employees, the net assets of the
     Zerrenner Foundation have been consolidated in AmBev's balance sheet
     (Note 2(m)). As the assets of the Zerrenner Foundation are not segregated
     and restricted between active and retired employees, they are not
     considered to be plan assets as defined by SFAS no. 106 and therefore
     consolidated on a gross basis rather than offsetting AmBev's
     postretirement liability. The net assets, at fair value at October 27,
     2000, excluding the actuarial liability, detailed below, held by the
     Zerrenner Foundation and the operating expenses, consolidated in our
     financial statements as at and for the year ended December 31, 2000,
     following the legal merger with the Brahma Welfare Foundation, are
     summarized as follows:

                                     F-86



<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
------------------------------------------------------------------------------



                                                             December 31, 2000
                                                            ------------------


Current assets
    Restricted cash                                                 US$ 34,651
    Others                                                               6,397
Property and equipment                                                  23,913
Investment in AmBev preferred shares                                    93,004
Investment in AmBev common shares                                      704,146
Others assets                                                              689
Current liabilities                                                     (2,194)
Noncurrent liabilities                                                  (3,189)
                                                            ------------------
                                                                       857,417
Less: Treasury shares                                                 (797,150)
                                                            ------------------
Net assets                                                          US$ 60,267
                                                            ==================

Operating expenses                                                   US$ 3,187
                                                            ==================


(f)  Funded status of Zerrenner Foundation (actuarial liability)

     Based on the report of our independent actuary, the funded status and
     amounts recognized in our balance sheet are presented in accordance with
     SFAS No. 132 as follows:


                                                   Zerrenner Foundation (1999-
                                                     Brahma Welfare Foundation
                                                 -----------------------------

                                                       2000               1999
                                                 -----------       -----------

Change in benefit obligation

Net benefit obligation at beginning of year      US$ 30,523         US$ 42,112
  Service cost                                          874
  Interest cost                                      13,024              2,160
  Actuarial loss                                      7,820              1,382
  Gross benefits paid                                (9,186)            (1,312)
  Consolidation of Antarctica                        58,823
  Foreign exchange gains                             (6,959)           (13,819)
                                                 -----------        -----------

Net benefit obligation at end of year            US$ 94,919         US$ 30,523
                                                 ===========       ===========



                                     F-87



<PAGE>

Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
------------------------------------------------------------------------------


                                                   Zerrenner Foundation (1999-
                                                    Brahma Welfare Foundation)
                                            ----------------------------------

Funded status at end of year                   US$ (94,919)       US$ (30,523)
Unrecognized net actuarial loss                     18,987             13,301
Unrecognized net transition obligation               9,117             10,666

Accrued benefit cost                           US$ (66,815)        US$ (6,556)
                                            ===============      =============


Post-retirement liability (current)                 (5,774)            (6,556)
Post-retirement liability (longterm)               (61,041)




                                                     2000(1)            1999(1)
                                            ----------------     -------------


Weighted-average assumptions
    as of December 31
Discount rate                                         8.12%              8.12%
Health care cost trend on covered charges             7.10%              7.10%

(1) Expressed in nominal terms

It has been assumed, for measurement purposes, that health care cost trends
for 2001 will not be considerably different from 2000. Our actuaries are
unable to project the direction and pattern of changes in the assumed trend
rates, the ultimate trend rates, nor can they estimate when the rates are
expected to be achieved.


                                     F-88



<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
------------------------------------------------------------------------------



                                                   Zerrenner Foundation
                                        (1999/1998 Brahma Welfare Foundation)
                                   ------------------------------------------

                                                       Year ended December 31
                                   ------------------------------------------

Components of net periodic                2000           1999            1998
  benefit cost                     -----------   ------------    ------------


Service cost                           US$ 874
Interest cost                           13,024      US$ 2,160       US$ 3,031
Amortization of:
  Transition obligation/assets             761            749           1,199
  Actuarial loss                           631            577             725
  benefit cost                     -----------   ------------    ------------

                                    US$ 15,290      US$ 3,486       US$ 4,955
                                   ===========   ============    ============


Assumed health care cost trend rates have a significant effect on the amounts
reported for the welfare plans. A one-percentage-point change in assumed
health care cost trend rates would have the following effects (all other
assumptions have been held constant):


                                One-percentage-point      One-percentage-point
                                            increase                  decrease
                                --------------------     ---------------------

                                     2000       1999           2000       1999
                                ---------  ---------     ----------  ---------


Total service and interest
  cost components                 US$ 314    US$ 259      US$ (122)  US$ (223)
Post-retirement benefit obligation  3,869      3,195        (3,338)    (2,746)




                                     F-89




<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
------------------------------------------------------------------------------

18   Commitments and contingencies

(a)  Tax and legal claims

     We are contesting the payment of certain taxes and contributions and have
     made court escrow deposits ("Restricted deposits for legal proceedings")
     of equivalent or lesser amounts pending final legal decisions. Our
     management believes that the accrued liability for legal proceedings,
     including interest, is sufficient to meet probable and reasonably
     estimable losses in the event of unfavorable rulings.

     Changes in the accrued liabilities for legal proceedings are as follows:


                                                        Year ended December 31
                                            ----------------------------------

                                                     2000                 1999
                                            --------------       -------------

At beginning of year                          US$ 163,309          US$ 208,033
    New provisions                                164,766              126,793
    Consolidation of Antarctica                    22,838
    Payments                                      (14,275)             (20,373)
    Interest                                       12,980               10,184
    Reversals                                     (13,544)             (85,332)
    Foreign exchange gains                        (25,095)             (75,996)

At end of year                                US$ 310,979          US$ 163,309
                                            =============        =============


The following probable losses have been identified based on the advice of
outside legal counsel and have been provided as liabilities in our financial
statements.

                                     F-90




<PAGE>



Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
------------------------------------------------------------------------------



                                                        Year ended December 31
                                            ----------------------------------

                                                     2000                 1999
                                            --------------       -------------


Indirect taxes (i)                            US$ 197,462          US$ 100,571
Labor claims (ii)                                  39,898               25,165
Claims from distributors (iii)                     14,523               15,239
Income tax and social contribution (iv)             7,927                4,317
Supplier and product claims                         4,001                4,433
Others                                             47,168               13,584


Total accrued liabilities for
  legal proceedings                           US$ 310,979          US$ 163,309
                                            =============        =============

AmBev may be exposed to additional possible risks, based on the opinion of the
legal counsel, of approximately US$ 223,000 (1999 - US$ 212,000) which have
not been provided. Although there can be no assurance that AmBev will prevail
in every case, management does not believe that the ultimate disposition of
these legal contingencies will have a material effect on AmBev's financial
condition or results of operations.

(i)  Indirect taxes


                                                        Year ended December 31
                                            ----------------------------------

                                                     2000                 1999
                                            -------------        -------------

IPI - excise tax and ICMS -
  Value-added sales taxes                     US$ 102,604           US$ 80,179
PIS and COFINS - taxes on revenues                 74,619               13,121
Other (principally FINSOCIAL)                      20,239                7,271
                                            -------------        -------------

                                              US$ 197,462          US$ 100,571
                                            =============        =============



                                     F-91



<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
------------------------------------------------------------------------------

During 1999, we obtained an injunction permitting the non-payment of PIS and
COFINS (taxes on revenues) on interest income and simultaneously provided for
the amount due, because the obligation is deemed probable, through a charge of
approximately US$ 24,000 (1999 - US$ 13,000) to "Value-added and excise tax on
sales". Although we have filed a claim against the tax authorities to support
our view that this tax is unconstitutional, we have recognized the legal
obligation for PIS and COFINS until such time we receive a final ruling or
when the law itself is struck down. As of December 31, 2000 the provision
amounts to US$ 39,216, which includes the provision relating Antarctica
amounting to US$ 23,623.

In October 1996, a tax law allowed credits of ICMS on capital expenditures to
be offset against the amounts payable on such tax. Based on this law and on
some constitutional principles we filed several lawsuits to allow us to offset
ICMS tax paid prior to 1996 and IPI excise tax paid in the 1997 and 1996
fiscal years against similar taxes payable. We offset approximately US$ 1,600,
US$ 17,000 and US$ 20,000 in relation to these taxes in 2000, 1999 and 1998,
respectively. Compensation resulted in a reduction of "Taxes on sales" and a
credit to "Other operating income". Simultaneously, a contingent liability was
recorded within "Accrued liability for legal proceedings. As we did not
receive an injunction obtaining favorable, nonappealable judicial rulings,
the corresponding assets, which might arise in the future, will only be
recognized once realization is assured. Also provisioned in this line item is
approximately US$ 9,086 (1999 - US$ 19,183) related to interest and penalties
of these ICMS and IPI contingent tax credits.

AmBev is also contesting the PIS contribution levied prior to 1995. The basis
for determining the PIS contribution charge was declared unconstitutional by
the Supreme Court in 1995, which also held that all legal entities were
entitled to recover the portion of PIS improperly charged in connection with
such legislation in excess of the predecessor legislation. The tax authorities
are litigating these issues, and disagree with the amount of credits to be
recovered by AmBev. A provision of US$35,403 has been made in relation to the
credits already used by AmBev, which includes the provision relating to
Antarctica of US$ 16,126.



                                     F-92



<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
------------------------------------------------------------------------------


(ii) Labor claims

     We are involved in approximately 8,000 legal proceedings with former and
     current employees, mainly relating to dismissals, severance, health and
     safety, premiums, supplementary retirement benefits and other matters. We
     have established provisions in connection with all proceedings for which
     we believe there is a probable chance of loss. Escrow deposits
     ("Restricted deposits for legal proceedings"), principally for labor
     claims, totaled US$ 18,296 at December 31, 2000 (1999 - US$ 9,755). At
     December 31, 2000 none of these claims individually amounted to more than
     US$ 500.

(iii) Claims from distributors

     As of December 31, 2000, approximately 270 breach-of-contract claims had
     been filed against us by former distributors whose contracts were
     terminated due to low sales volumes, failure of distributors to meet our
     guidelines and a general restructuring of the distribution network. Most
     of these claims were originally filed from 1996 through 2000. Of these
     claims, approximately 240 are still in the lower courts, 27 have been
     appealed and are now in intermediary court levels, and 3 claims are
     currently being reviewed by the highest-level appeal court in Brazil, the
     Supreme Court of Justice.

     We have provisions for probable losses of US$ 14,523, based on advice of
     outside legal counsel. During 2000, we paid US$ 1,017 to the former
     shareholders of one of our suppliers, India S.A, a company acquired by
     Malteria Pampa in 1994.

(iv) Income tax and social contribution

     During 2000 we provisioned an additional US$ 2,296 for interest on social
     contribution tax payable.

     During 1999, we reversed US$ 30,929 of contingent liabilities to "Income
     tax benefit" relating to unasserted income tax exposures which were
     eliminated upon expiry of the applicable statutes of limitations. The
     most significant amount (US$ 21,654) reversed related to the methodology
     for price-level restatement equity accounting adjustments in monthly
     balance sheets for tax purposes. Through to the date of expiration of the
     statute of limitations, the level of uncertainty was such that management
     considered the liability to be probable and estimable. We have
     subsequently realized the tax asset through offsetting of tax payments
     due.

                                     F-93


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
------------------------------------------------------------------------------


     In 1998, we reversed US$ 21,070 relating to income tax and social
     contribution payable, among other items, which the tax authorities
     claimed should not have been offset by depreciation charges generated
     from supplemental indexation of property, plant and equipment accounts
     applied by a law enacted in 1991. During 1998, following the expiration
     of a five-year statute of limitations period, we reversed US$ 80,366,
     relating to unasserted income tax and social contribution tax. Expiry of
     the statute of limitations, in the opinion of our tax and legal counsel,
     reduces the probable contingency to a remote contingency.

(v)  Other tax matters

     We have also filed claims against the tax authorities to support our view
     that certain taxes levied are unconstitutional, although we have been
     required by law to pay these amounts, deposit the amounts into court
     legal escrow accounts and/or make provisions for amounts legally due.
     These legal proceedings include claims for taxes on income, ICMS
     valueadded taxes and IPI excise taxes, among others. We are prosecuting
     claims against the tax authorities to assure we effectively benefit from
     IPI tax exemptions on certain inputs. Currently the "exemption" becomes a
     mere tax deferral at the time of sale. As this and other claims are
     contingent upon obtaining favorable, nonappealable judicial rulings, the
     corresponding assets, which might arise in the future, are only
     recognized once realization is assured.

(b)  Post-employment benefits

     We maintain a pension plan and other post-employment benefits (Note 17)
     for our employees and make monthly contributions based on payroll expense
     to the government pension, social security and severance indemnity plans.
     We are required to contribute 8% of each employee's gross pay to an
     account maintained in the employee's name in the Government Severance
     Indemnity Fund (FGTS). No other contributions to the FGTS are required.
     Such payments are expensed as incurred.


                                     F-94



<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
------------------------------------------------------------------------------

     Under Brazilian law, we are also required to pay termination benefits to
     employees dismissed without cause. The amount of the benefit is
     calculated as 40% of the accumulated contributions made by us to the FGTS
     during the employee's period of service. We do not accrue for these
     termination payments before a decision to terminate has been made, since
     the benefits are neither probable nor reasonably estimable. Any such
     terminations occur in the ordinary course of business and are not
     material to our consolidated financial condition, statement of operations
     or liquidity. Termination expenses were US$ 6,193, US$ 4,044 and US$
     6,615 in the years ended December 31, 2000, 1999 and 1998, respectively.

(c)  Environmental issues

     We are subject to federal, state and local laws and regulations relating
     to the environment. These laws generally provide for control of air
     emissions and require responsible parties to undertake remediation of
     hazardous waste disposal sites. Civil penalties may be imposed for
     noncompliance.

     We provide for remediation costs and penalties when a loss is probable
     and the amount is reasonably determinable. It is not presently possible
     to estimate the amount of all remediation costs that might be incurred or
     penalties that may be imposed. Our management does not presently
     anticipate that such costs and penalties, to the extent not previously
     provided for, will have a material adverse effect on our consolidated
     financial condition, statement of operations or liquidity.

     At present there are no unasserted environmental claims or assessments.
     We have made substantial capital expenditures to bring existing
     facilities into compliance with various environmental laws. Recent
     expenditures are as follows:


Year ended               Property, plant             Waste
December 31,               and equipment         treatment              Total
-------------           ----------------      ------------        -----------


2000                             US$ 874        US$ 17,528         US$ 18,402
1999                               1,369             6,963              8,332
1998                               5,709            15,387             21,095


Budgeted expenditures for the five-year period ending December 31, 2005 total
approximately US$ 102,000 (unaudited).


                                     F-95


<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
------------------------------------------------------------------------------


(d)  Indemnity

     Buenos Aires Embotelladora S.A. - BAESA , from whom we purchased Pepsi Cola
     Engarrafadora Ltda. and PCE Bebidas Ltda, has agreed to indemnify us
     against 80% of certain contingencies, but in no event to exceed US$
     20,000 in aggregate for a period of five years from the date of purchase
     in October 1997. Additionally, we have an indemnity agreement, the amount
     of which is not limited, from PepsiCo, Inc., which requires PepsiCo, Inc.
     to reimburse us for 80% of certain contingencies within a period of five
     years from that date of purchase. To date we have not made any
     substantial payments in relation to these contingencies, for which
     reimbursements is due.

19   Business segments

     We report our business segment data in accordance with SFAS No. 131,
     "Disclosures about Segments of an Enterprise and Related Information".
     SFAS No. 131 requires disclosure about products and services,
     geographical areas, and major customers. AmBev's business is comprised of
     two main segments: beer and soft drinks, which together accounted for 98%
     of AmBev's net sales in 2000 and 97% of AmBev's net sales in 1999.

     SFAS No. 131 requires that segment data be presented in the U.S. GAAP
     financial statements on the basis of the internal information that is
     used by management for making operating decisions, including allocation
     of resources among segments, and segment performance based on information
     generated from its statutory accounting records which are maintained in
     accordance with Brazilian Corporation Law, the segment data of AmBev
     included in AmBev's financial statements is presented under Brazilian
     Corporation Law accounting principles (except as noted below). The CADE
     decision was not handed down until April 7, 2000, at which time certain
     operating restrictions were lifted which had previously precluded
     consolidation under U.S. GAAP. Accordingly the underlying segment data in
     the U.S. GAAP financial statements, derived from the accounting records
     which are maintained in accordance with Brazilian Corporation Law, show
     the nine month information for Antarctica only as from April 1, 2000
     because we were effectively precluded from modifying the level of
     resources allocated to the Antarctica business segments.



                                     F-96



<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
------------------------------------------------------------------------------

     Certain expenses were not allocated to the segments. These unallocated
     expenses are corporate overheads, minority interests, income taxes and
     financial interest income and expense. We evaluate segment performance
     information generated from the statutory accounting records. Certain
     operating units do not separate operational expenses, total assets,
     depreciation and amortization. These amounts were allocated based on
     statutory gross sales.

     The local currency information related to the statement of operations
     data has been translated to U.S. dollars, for convenience purposes, at
     the average rates of exchange in effect for each period presented. The
     balance sheet information has been translated to U.S. dollars at the
     respective periodend exchange rates.

     We have prepared a reconciliation of segment information to our
     consolidated financial statements.


                                    2000              1999              1998
                           --------------   ---------------    --------------

Beer                       US$ 2,206,780    US$ 1,516,418      US$ 2,187,505
Soft Drinks                      410,343          212,556            454,869
Others                            58,828           60,905             76,863
U.S. GAAP adjustments (1)        (40,715)         (13,936)           (49,899)
                           --------------   ---------------    ---------------

  Net sales (U.S. GAAP)    US$ 2,635,236     US$ 1,775,943      US$ 2,669,338
                           ==============   ===============    ===============

Beer                         US$ 476,040       US$ 253,790        US$ 410,216
Soft Drinks                       21,904           (37,637)           (33,878)
Others                            (6,873)            4,169             13,183
U.S. GAAP adjustments            (56,268)          (36,183)          (180,132)
                           -------------    --------------    ---------------

  Operating income
     before net
     financial expense
     (U.S. GAAP)(2)          US$ 434,803       US$ 184,139        US$ 209,389
                           ==============   ===============    ===============


Less:
  Financial expense, net    US$ (145,897)      US$ (77,416)       US$ (90,868)
  Other nonoperating
    (expense) income, net           (901)           (8,448)            14,994
  Income tax benefit
    (expense)                    387,240            41,388             92,696
  Equity in earnings of
    affiliates                    11,678             5,404              2,962
  Equity in losses of
    Antarctica                   (49,879)         (179,116)
  Minority interest
    participation                (14,202)            3,498              9,404
                           --------------   ---------------    ---------------
  Net income (loss)
    (U.S. GAAP)              US$ 622,842       US$ (30,551)       US$ 238,577
                           ==============   ===============    ===============


                                     F-97


<PAGE>



Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
------------------------------------------------------------------------------


(1)  Our U.S. GAAP net sales differed from the net sales presented under
     Brazilian Corporation Law, in part because the revenues of some
     affiliates are included on a proportional consolidation basis under
     Brazilian Corporation Law, whereas these affiliated company revenues are
     not included in the consolidation under U.S. GAAP. This was partially
     offset by our having recorded in net sales value-added sales tax credits
     under U.S. GAAP, whereas under Brazilian Corporation Law these credits
     from our plants are recorded directly into shareholders' equity. Similar
     credits from our subsidiaries are recorded under Brazilian Corporation
     Law as Other non-operating income and are also reclassified to Value-added
     and excise taxes on sales under U.S. GAAP. Tax contingencies which are
     recorded under Other operating income (expense) for Brazilian Corporation
     Law purposes are also reclassified to Value-added and excise taxes on
     sales for U.S. GAAP reporting purposes. Revenues from no individual
     customer represent more than 10% of our consolidated sales.

(2)  Operating income under U.S. GAAP differs in certain aspects from our
     operating income under Brazilian Corporation Law principally due to
     differences in consolidation methodologies and to a lesser extent, to
     reclassifications of certain gains/losses which are recorded as Other non
     operating income/expense in the statutory books and are also reclassified
     to the respective income statement line items under U.S. GAAP, i.e.
     gain/losses arising from disposal of property, plant and equipment, gains
     from tax credits granted to our subsidiaries, as mentioned above.
     Furthermore under U.S GAAP we record our actuarial with respect to
     pension plan and post-retirement benefits in accordance with FAS 87 and
     FAS 106, respectively.


                                                        Year ended December 31,
                                        ---------------------------------------

                                                    2000                  1999
                                         ---------------        ---------------

Assets


Beer                                      US$ 1,875,347          US$ 1,127,833
Soft Drinks                                     533,664                297,808
Others                                          189,027                186,044
U.S. GAAP adjustments                          (182,224)              (115,022)
                                         ---------------       ----------------
Total segments assets (U.S. GAAP)             2,415,814              1,496,663
                                         ---------------       ----------------
General corporate (U.S. GAAP)                 1,555,982              1,353,836
                                         ---------------       ----------------

  Total assets (U.S. GAAP)                US$ 3,971,796          US$ 2,850,499
                                         ===============       ================



                                     F-98



<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
------------------------------------------------------------------------------



                                                       Year ended December 31,

                                 2000                 1999                1998
                         ------------        -------------      ---------------


Beer                      US$ 243,449          US$ 210,608         US$ 228,356
Soft Drinks                    43,213               27,906              51,020
Others                          5,548                2,862               5,658
U.S. GAAP adjustments         (34,037)              (6,473)            (21,680)
                         ------------        -------------      ---------------

Total depreciation
  and amortization
    (U.S. GAAP)           US$ 258,173          US$ 234,903         US$ 263,354
                         ------------        -------------      ---------------


Information on our geographic areas is as follows:

Domestic                US$ 2,461,632        US$ 1,581,863       US$ 2,521,407
International                 214,319              208,016             197,830
U.S. GAAP adjustments         (40,715)             (13,936)            (49,899)
                        --------------       --------------     ---------------
    Total net sales
    (U.S. GAAP)         US$ 2,635,236        US$ 1,775,943       US$ 2,669,338
                        ==============       ==============    ================

Domestic                US$ 1,483,186          US$ 885,702       US$ 1,567,779
International                 351,194              323,295             389,997
U.S. GAAP adjustments         (54,333)             (79,852)            (92,069)
                        --------------       --------------     ---------------

    Total long-lived
    assets (U.S. GAAP)  US$ 1,780,047        US$ 1,129,145       US$ 1,865,707
                        ==============       ==============    ================

International sales and operations arise from our subsidiaries in Argentina
and Venezuela. Revenues from no individual customer represented more than 10%
of our net sales.


                                     F-99



<PAGE>


Companhia de Bebidas das Americas - AmBev

Notes to the Financial Statements
at December 31, 2000 and 1999
Expressed in thousands of United States dollars, unless otherwise stated
------------------------------------------------------------------------------

20   Supplemental cash flow information

     As permitted by current tax laws, we defer payment of certain sales taxes
     and record these as sales tax deferrals (Note 14); amounts deferred
     during 2000 approximated US$ 27,689. Non-cash transactions include the
     reversal of the contingency provisions detailed in Note 18 and settlement
     of income taxes through offset of net operating losses. We finance our
     import of raw materials and equipment with short-term loans and with the
     receipt of these loans the banks pay directly our suppliers. These
     payments are not reflected in our statements of cash flows.

     We have consolidated all balance sheet captions of Antarctica as of April
     1, 2000 in our statement of cash flows in a single line item, "Cash from
     Antarctica, consolidated as of April 1, 2000". Accordingly, the operating
     asset and liability variations presented in our statement of cash flows
     differ from the changes in the balance sheet captions.

21   Subsequent events

(a)  Merger of Antarctica and Brahma

     On April 2, 2001, we merged our wholly-owned Brazilian legal corporate
     entity Brahma into Antarctica and the latter changed its name to
     Companhia Brasileira de Bebidas. This merger did not involve third
     parties nor did it affect the minority shareholders of the subsidiaries
     of Antarctica.

(b)  Contribution to the Zerrenner Foundation

     As part of the process of merging the Brahma Welfare and Zerrenner
     Foundations (Note 17(e)), an actuarial evaluation was carried out to
     determine the level of contributions required to be made to the Zerrenner
     Foundation to provide benefits to all employees compatible with those
     formerly provided by the Brahma Welfare Foundation. The actuarial
     evaluation concluded the need for additional contributions by AmBev over
     the next several years of approximately R$100 million (US$ 51,140 at the
     December 31, 2000 exchange rate). On April 27, 2001, as permitted by our
     bylaws (Note 17(e)), we made a contribution of US$ 9,017 to the Zerrenner
     Foundation.

                                     * * *


                                     F-100



<PAGE>


            Atencao: Esta folha devera acompanhar o trabalho e nao
                         devera ser destacada do mesmo

                       Continuacao da Folha de Controle


                                    F-101